Sioux Falls Real Estate Blog

$8,000 Tax Credit for First Time Homebuyers

Having a hard time wading through all the stimulus plan jargon in order to find out what it all means for you as a home buyer? You’re in the right place. Here’s the Who, What, Where, When, Why, and How of the new $8,000 tax credit for first time home buyers recently passed by Congress.

Who?

This tax credit applies to all first time homebuyers. In order to qualify as a “first time home buyer,” neither you nor your spouse can have owned a home for three years prior to purchasing your new one. Still sound like you? Read on.

What?

The simple definition: A tax credit of up to $8,000 for first time homebuyers purchasing a home in 2009. Now for the nitty gritty: The credit will be equal to 10 percent of the price of your home up to $8,000. All primary residences are eligible. That means single-family homes, condos, townhomes, co-ops, and more, as long as they are your primary place of residence. Wondering about income limitations? You are eligible for the full $8,000 if your income is $75,000 or less as a single buyer or $150,000 for couples. Single and married buyers whose income exceeds these limits are still eligible for a portion of the credit up until incomes exceed $95,000 and $170,000, respectively. The best part of it all? As long as you live in your new home for three years or more, the tax credit does not need to be repaid.

Where?

As long as your home is being purchased in the United States, it qualifies.

When?

You must purchase your home between January 1, 2009 and December 1, 2009 to be eligible.

Why?

The hope is that this tax credit will jump-start the housing market as a part of the overall economic stimulus plan. And you get to benefit.

How?

Claim the credit on the new IRS First Time Homebuyer Credit form (Form 5405) with your 2008 or 2009 tax return. Consult your CPA, accountant, or tax professional before purchasing a home and pursuing this tax credit benefit.

Still have questions? Visit http://www.gregkneip.com, for helpful information on the complete home buying process. Also try these additional resource sites:

http://www.federalhousingtaxcredit.com/2009/home.html

http://www.realtor.org/government_affairs/gapublic/homebuyer_tax_credit

http://www.irs.gov/newsroom/article/0,,id=206291,00.html

http://www.irs.gov/newsroom/article/0,,id=206293,00.html

http://www.sdhda.org

Kneip & Company, at HJN Team Real Estate

101 W. 69^th St., #101 Sioux Falls, SD 57108

605.728.9200  http://www.gregkneip.com

-- Article by Freelance Writer Molly Keen molly.keen@huskers.unl.edu