First time home buyers, this is your time to save! There is a first time buyer tax credit of $8,000 available when you buy a home before December 1, 2009.
For a first time buyer, it really doesn’t get any better than this. Inventory levels are at an all time high, so selection is excellent. Home loans are at an all time low, so your monthly payments will never be lower. And now, the Treasury Department is offering $8,000 to boot! Here’s how it works.
Who is a first time buyer?
Seem like a strange question? Well, the answer is even stranger. You would think a first time buyer is someone who, well, had never bought a home before, right? Sort of.
A first time home buyer, for the sake of this tax credit, is anyone who has not owned a home in the last 3 years. You could have owned a home and sold it 37 months ago, rented for the last 36 months, and qualify as a first time buyer.
What homes qualify?
The only rules here are that the home must be your primary residence, it must be in the United States, and it must not be purchased from a family member.
Are there income limits?
There are. If your income is $75,000 or less ($$150,000 or less if married filing jointly) you qualify.
Do you have to pay the money back?
Maybe… but maybe not! If you sell your home, or convert it to an investment property, within 36 months of the date you purchased it, you have to repay the tax credit in full. But, if you live in the home as your primary residence for a full 36 months, you do not have to pay a single penny of the money back.
How do you claim the first time buyer tax credit?
As always seek advice from your tax professional, however, there is an IRS tax form 5405, titled First-Time Homebuyer Credit, that you can file to take the deduction.
So now, what are you waiting for? If you’re a first time buyer, go out there and buy a home. Do your part to stimulate the economy and get yourself a fantastic deal on a new home! This perfect scenario for first time buyers won’t last forever.
