Time Is Running Out for the $8,000 First-Time Homebuyer Credit

Thinking of buying a home? Now is a good time to do so but you need to act soon if you want to take advantage of the $8,000 first-time homebuyer credit. This credit only applies to purchases completed before December 1st of this year. It does not have to be repaid if the home is occupied as a principal residence for the first 36 months after its purchase. The credit is 10% of the cost of the home, up to a maximum credit of $8,000; therefore, nearly all qualified first-time homebuyers will be eligible for the $8,000 maximum. If the credit exceeds your tax, you can claim a refund of the excess.

You are considered a first-time homebuyer if you and your spouse, if you are married had no present ownership interest in a principal residence in the U.S. during the three-year period before the purchase of the home to which the credit applies. It is important to note that this credit is not available to high-income taxpayers and begins to phase out for married couples with adjusted gross incomes (AGI) in excess of $150,000 and for unmarried taxpayers with AGI in excess of $75,000.

The credit is available on a taxpayer’s 2009 return or amended 2008 return, which means that the funds are not available until after the refund is received from either of those filings. This can be a problem for some potential buyers who have difficulty coming up with funds for the required down payment and closing costs. Recently, however, the Department of U.S. Housing and Urban Development announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the $8,000 first-time homebuyer tax credit toward the purchase costs of an FHA-insured home.

So if you are in the market to purchase a home and you need assistance properly filing your tax return to claim this credit, we are here to help. Give us a call at 407.992.4454 or send an email to info@newgenesisltd.com.