News, updates, and explanations to keep you informed.
The 2009 First-Time Homebuyer's Tax Credit
The 2009 First-Time Homebuyer's Tax Credit is a big help for many prospective home buyers, and quite different than the 2008 tax credit. One of the most important details? The 2009 tax credit is a true credit and is not repaid by the homeowner later. Are you in need of some first-time homebuyer relief? The 2009 tax credit offers up to $8000 in tax credits for those who buy between 1 January 2009 and 1 December 2009. (President Obama has signed off on the bill approving of the extension of the $8,000 New Home Buyer Tax Credit until April 30, 2010) There are plenty of questions about the 2009 tax credit, knowing the answers can help you make an informed choice about purchasing your first home in 2009:
How much tax credit I am entitled to?
First time homebuyers in 2009 are eligible for a tax credit totaling 10% of the purchase price of the home, up to a maximum of $8000. Your amount may be less depending on the purchase price of your house.
My tax preparer says the purchasing date on my home must be between January 1, 2009 and December 1, 2009. For this tax credit, what's considered the purchasing date?
To qualify for the 2009 First Time Homebuyer's Tax Credit, the date when you close on the house and the titled is transferred into your name must fall between 1 January 2009 and 1 December 2009. That date you qualified for the loan or signed the loan paperwork doesn't count. The date on your title is your purchase date.
I want to buy a condo or townhouse as my first home. Do I qualify?
Like many government programs such as FHA mortgages and VA loans, condos and townhouses are eligible for the 2009 tax credit as long as you intend to live there as your primary residence. The rules of the 2009 First Time Homebuyer's program also let you qualify if you're buying a manufactured home, mobile home or houseboat. In every case you must buy the home as your primary residence.
Can I buy a summer home and still qualify?
Summer homes are not considered primary residences. If you already own a summer home, you may qualify for this tax credit unless you have purchased a primary residence within the last three years. Other restrictions may apply, see your tax advisor for details on your specific situation.
What if I purchased a home in 2009 but didn't file for the 2009 tax credit?
Under certain circumstances you may be able to file an amended tax return to get your 2009 tax credit. This is done by filing a 1040X; if you are unfamiliar with how to do this properly, get professional tax help. It's important to file the amended return properly and claim the tax credit you are entitled to by law.
Is the 2009 First Time Homebuyer's Tax Credit a deduction? Do I get money back?
This program is not like other homeowner relief programs like the Obama Mortgage. The $8000 you may be entitled to this year is a tax credit--it reduces the amount of money you owe the IRS.
Do you still have unanswered questions? Consult your loan officer and your income tax preparer. Depending on your circumstances, you may need to file additional paperwork or an amended tax return (as mentioned above). Always get professional advice if you don't understand how to fill out or properly file amended returns or other documents required by the IRS.