House Hunting? If you bought your FIRST HOME this year, you could get receive $8,000 from the IRS! Considering the increased amount of foreclosures, this is a great time to get into your first home. But you have to do it fast, your deadline is December 1, 2009.
The Low-Down Here's the IRS's official overview on the First Time Home Buyer credit.
- Applies to purchases that close after April 8, 2008, and before Dec. 1, 2009.
- Applies only to homes used as a taxpayer's principal residence.
- Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
- Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
How much? The credit is 10% of the purchase price of the home for a maximum amount of $8,000 for 2009 ($7,500 for 2008).
You don't have to be a "Property Virgin"- For the purpose of this legislation, a "First Time Home Buyer" is someone who hasn't owned a principal residence for three years before buying a house this year.
I'm interested, Sign me up! Claim the credit with IRS Form 5405 and file it with your 2008 or 2009 federal income tax return.
The Catch This is the IRS we're talking about, and there's always a catch. If any of the following applies to you, you cannot claim the new credit.
- If you income exceeds the phase-out range. $95,000 or $170,000 filing jointly.
- You buy the home from a close relative (spouse, parent, grandparent, child, grandchild)
- You're a non resident alien
- You sell your home before the year ends
- You are (or were) eligible for the District of Columbia first-time home buyer credit for any taxable year.
- You owned a home any time during the three years prior to purchasing the new home
By the way, you can't use this as a down payment... a lot of folks have asked me if they can receive the First Time Home Buyer credit NOW so they can use the refund for a down payment. The IRS's answer is a flat "NO". They don't want people to claim the credit in anticipation of a purchase that has yet to happen. You won't qualify until the purchase is finalized.
And Remember you are not required to apply for this credit if you purchase a new home in 2008 on 2009. Don't want to bother with the paperwork? You don't have to. But it might be worth it to save up to $8,000 next year.
You've got less than 6 months to spare, if you want to buy, buy now!