This is just a reminder that the time is running short to be able to take advantage of the refundable tax credit for first-time buyers outlined in the "American Recovery and Reinvestment Act of 2009."
BUYERS MUST CLOSE ON THEIR PROPERTIES BEFORE DECEMBER 1, 2009.
Here is some additional information about the tax credit:
- Max Amount: The first-time buyer credit is equivalent to 10 percent of the purchase price of the home and is capped at maximum amount of $8,000. The tax credit can only be used to purchase principal residences (and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid.
- First time buyers: For the purpose of this tax credit, a "first-time home buyer" is someone who has not owned, or been included on title to, a property in the last three years. Unmarried joint purchasers can pass the credit to any buyer who qualifies as a first-time buyer. For married buyers, both must qualify as first-time buyers to be eligible for the tax credit. The credit can be used to purchase a new or older home, condo or manufactured home.
- Date restrictions: Only those who purchase a home – on or after January 1 and before December 1, 2009 are eligible for the credit. “Purchase Date” is the date that title is transferred. in Minnesota, this is your closing date – not the date you sign your purchase agreement.
- Income limits: There are income limits to claim the credit. The tax credit phases out for single taxpayers with adjusted gross income of $75,000 to $95,000. For married couples who file jointly, the phase-out is between $150,000 and $170,000.
- Refundable: the tax credit is refundable, meaning that homeowners that owe less than $8,000 in federal income taxes will actually receive a refund of the difference.
- Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions may be made in certain cases, such as death or divorce.)
For a printable version of the tax credit information listed above, click here.
Ready for home ownership? Not sure if you can afford it? Wondering if there are other programs/incentives/dollars available for first/time buyers? Not sure what steps to take next? Speak with a HOME STRETCH housing counselor for answers to these... and any other home ownership questions you may have!
For more information about HOME STRETCH, click here.