I’ve gotten a few questions just in the last week again about the 1st Time Home Buyer Tax Credit, and thought I’d address them here. Note: This post is corrected as of 8-26-09.
This program was put in place to stimulate the housing market by giving qualified 1st time home buyers a financial incentive to buy something now (as if incredible interest rates and low prices weren’t already reason enough!). The IRS has a pretty good web site information center on this at http://www.irs.gov/newsroom/article/0,,id=205416,00.html, but let me give you the ‘Readers Digest’ version.
1. The credit is 10% of the purchase, up to $8,000 ($4,000 for married filing separately). It is a credit, not a deduction, and it is refunded to you even if you did not owe any taxes.
2. It can be taken against your 2008 OR 2009 taxes, so if you already filed 2008, you can file an amended return to get it back.
3. To qualify, you can’t have owned a home in the prior 3 years, and it is phased out in the higher income brackets.
4. It is a GREAT deal. Since FHA financing only requires 3.5% down, it effectively means the IRS is making your down payment on an FHA deal all the way to a $228,000 purchase, which is right at the average sale price in Colorado Springs.
5. It only applies to purchases between April 8, 2008 and December 1 2009. This means that even if you bought your house last year, before the economy really tanked, you are still eligible, and if you have not bought yet, you have until 12/1 to close.
6. You have to file a tax return and complete a required tax form in order to get this, it is NOT an automatic. If you’ve previously filed your 2008 return, you can amend the return to receive this as refund.
Hope this helps! Not a first time home buyer? Not a problem, pass this information along to someone who might be! Questions? Call Rick Van Wieren at 888-568-6784 or 719-590-4768 or email firstname.lastname@example.org.
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