Full Details on the FTHB Tax Credt – By Request
I’ve made several posts regarding the $8000.00 (eight thousand dollar) tax credit that is available to First Time Home Buyers, but the information came over several weeks and looking back it’s a little disjointed. After recent requests for a recap, I’m pulling it all together for a full review. It’s great information and while it may not pertain to every buyer, most people know someone who is considering their first home and I guarantee this will prove helpful.
First things first, you don’t have to be a first time home buyer to claim this credit, well sort of. If you are a previous home owner, but have not owned a home for 3 years, you may qualify for this credit. I would recommend that you consult your tax preparer if you may be borderline on this issue. An $8000 credit is great, but not worth getting into hot water with the IRS!
As of February when this FTHB tax credit was revised to $8000, it was also improved to be a true credit. One that does not have to be repaid. The only catch is that you must own this property and use it as your primary residence for at least 3 years. (Previously, the credit was $7500, and required annual $500 payments for 15 years, making it a $7500 loan for 15 years at 0%. Don’t worry too much about this, it’s over and done with now.)
The tax credit is equal to 10% of the purchase price, up to a maximum of $8000. If you’re purchasing a home that is $81,000 or more, you will get the full $8000 credit.
The window for taking advantage of this credit is very FINITE. Homes purchased between January 1, 2009 and December 1, 2009 qualify. The transaction must be closed within this window. Obviously there is a fair amount of time left in which first time buyers can get on board, but I highly recommend not getting down to the wire. It would be a shame to miss out on $8000 because you missed your closing by a few days.
Income limitations, of course, when aren’t there income limitations. 
Thankfully these are also quite generous. Single taxpayers with incomes up to $75,000 or married couples with incomes up to $150,000 qualify for the full credit. If you exceed this income limit you may qualify for a partial credit of less than $8000.
If you are a first time home buyer that purchased between April 9, 2008 and January 1, 2009 you may be eligible for the former tax credit mentioned above ($7500 credit/interest free loan). Information about this program is available here.
To review a pretty thorough rundown on the $8000 first time home buyer tax credit I think that this website, is pretty well put together. Of course, you’re always welcome to contact me via email, phone, sms text message, or messenger pigeon and I can help as well. Bottom line, if you have ever thought about owning a home, now is the time to make every effort to make that dream a reality. Prices are down, inventory is up, interest rates are down, and the government would like to hand you $8000 as a house warming gift.
