$8,000 Tax Credit for First Time Homebuyers!

President Obama signed the American Recovery and Reinvestment Act (Stimulus Package) into law on Tuesday, February 17, 2009.

Here are some of the highlights of this Act as it relates to the purchase of Real Estate:

First Time Homebuyers (people who have not owned a home during the past 3 full years) will receive an income tax credit of 10% of the purchase price of the house up to a maximum $8,000.

This tax credit does not need to be paid back provided the buyer uses the house as their principal residence for 3 full years.

This tax credit will either reduce the amount of taxes you owe (if you owe more than $8,000) or will increase your refund (if you owe less than $8,000 or if you are already getting a refund.

This tax credit will be effective on all purchases between January 1, 2009 and April 30, 2010.

There are income limitations to qualify for this tax credit.  Single tax filers adjusted income cannot exceed $95,000 and the credit amount is reduced (begins to phase out) when adjusted income exceeds $75,000.  Joint tax filers adjusted income cannot exceed $170,000 and the credit amount is reduced (begins to phase out) when adjusted income exceeds $150,000.

If you sell your house or stop using it as your principal residence within 3 years, the tax credit must be repaid.  This is to prevent utilizing the tax credit to “flip” houses.

This is a great program and a great way for first time home buyers to realize the dream of owning your own home.   You must close on your new house no later than April 30, 2010.

To see how this tax credit can work for you contact  a 1st Choice Builders sales associate and return to this website for updates.

The Worker, Homeownership and Business Assistance Act of 2009, signed on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts.

Under the new law, you must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. 

The new law also:

Authorizes the credit for long-time homeowners buying a new principal residence.

Raises the income limitations for homeowners claiming the credit.  

920-336-4980

1ST CHOICE BUILDERS  CUSTOM HOMES AND REMODELING