Recently, I have received many questions from prospective homebuyers about the 2009 homebuyer tax credit bill -- which provides $8,000 tax credit to first-time homebuyers for the purchase of their principal residence between January 1, 2009 and December 1, 2009. I wanted to share with you a very informative FAQ (http://tinyurl.com/b8mysm) from the National Association of Realtors (NAR) to address many of your questions and concerns about the details of the bill.Here are some highlights:
- You must be a “first-time” homebuyer, which is defined as someone who has not owned a home in 3 years prior to the day of your 2009 purchase.
- The 2009 tax credit is refundable (i.e. IRS will send you a refund check if your tax liability is less the $8,000).
- The income restriction for a full tax credit is $75,000 for individuals and $150,000 for married couples.
- You may receive partial credit for income up to $95,000 for individuals and $170,000 for married couples.
- The home must be your principle residence and owner-occupied.
- You do not have to repayment 2009 tax credits; However, if you sell the property within 3 years of the purchase, your are required to pay back the full amount of any credit, including any refund you received from it.
- You can claim your 2009 tax credit when filing your 2008 tax returns by April 15, 2009.
- Close of escrow must occur on or before Dec. 1, 2009; if the property is under construction when purchased, you must occupy the home before Dec. 1, 2009.
2 comments:
I heard there was a 10k california credit, you know anything about that?
Hi V.Y.,
You are referring to the $10K California tax credit for new homes purchases (which is different from the $8K first-time homebuyer's tax credit.)
The $10K tax credit is a state credit for purchase of new homes(that have never been occupied)between March 1, 2009 and March 1, 2010.
Homebuyers may be able to take advantage of both incentives -- let's say you qualified for the $8K first-time homebuyer's tax credit AND you buy a new home and move in by Dec. 1, 2009, you'll be able to claim both $8K tax credit AND $10K new homes purchase credit. It's advisable that you consult an accountant first and verify your qualification and tax implications first before you make your investment.
For more details about the $10K Tax Credit for New Home Purchase, you may visit: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml.
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