There have been a lot of questions recently about the new tax credit for first-time home buyers. I say “new” because it does differ from the credit allowed in 2008. Here are the highlights:
- The tax credit is for first-time home buyers only. The IRS defines a first-time home owner as; 1) someone who has never owned a home, or 2) someone who has not owned a principal residence during the three-year period prior to the new purchase.
- Under the new 2009 guidelines, the tax credit does not have to be repaid, ever!
- The tax credit is equal to 10 percent of the purchase price, up to a maximum of $8,000. No problem in Los Angeles, obviously.
- The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
If your income is higher than the maximum allowed, you may still qualify for a partial credit, and these days, it all counts. Check with your tax professional to get further details and see if you qualify.