There has recently been a big boost in pending home sales which likely reflects the impact of a new $8,000 tax credit for first-time homebuyers. This government tax credit was included in the economic stimulus bill signed by President Barack Obama in February of this year. Since buyers need to finish their purchases by Nov. 30 to claim the credit, "we expect greater activity in the months ahead," Lawrence Yun, the Realtors' chief economist, said in a recent statement.
“The economy is being stimulated from the ground up by giving first time homebuyers an $8,000 tax credit.” This true ‘credit’ will be issued during filing of your 2009 tax returns, consult your tax accountant for specific details.
Rules for using the First Time Homebuyer Credit:
The credit is available to first time homebuyers, defined as an individual who has not owned a home in the three year period prior to their new purchase.
Eligible buyers must buy a principal residence on or after January 1, 2009 and before December 1, 2009.
The purchase date is defined as the date of closing and property title transfer.
The tax credit is equal to 10 percent of the home's purchase price, up to a maximum of $8,000.
Income limits apply in order to get the full credit available - for single taxpayers, $75,000 and for married taxpayers, $150,000. Above those limits, there is still some credit available, depending on the buyer's modified adjusted gross income.
The tax credit is claimed by filing a Form 5405 with the taxpayer's 2009 tax return or by amending the 2008 return.
Because it is a refundable credit, it can be claimed even if the taxpayer had no tax liability.
*Your first step to home ownership is to get pre-approved. Do that by clicking the button below or calling to speak with a qualified VA Loan Specialist. After you are pre-approved, we will gladly connect you with a real estate agent so you can begin your home search!
