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First-Time Home Buyer Tax Credit
Jul 29, 2011
First-Time Home Buyer Tax Credit:
Things To Know
President Barack Obama signed into law in February of this year the "First-Time Home Buyer Act," designed to help revive the real estate market. Here are some thoughts you may find helpful in seeing if you qualify for the $8,000 tax credit.
1. $8,000 to new buyers: The credit is equal to 10% of the purchase price of the home, capped at $8,000. It applies only to first-time home buyers and principal residences. Unlike the earlier home buyer tax credit, this one does not have to be repaid.
2. Definition of First-Time Home Buyer: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house.
3. Must purchase in 2009: Only those who purchase a home on or after January 1st and before December 1, 2009 are eligible for the credit.
4. Income limits: This tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit ($150,000 for married couples).
5. "Refundable" Tax Credit: Qualified buyers are able to take advantage of the tax credit even if they don't have much tax liability.
6. Recapture Rules: Buyers do have to own the home for at least three years in order to capitalize on the credit. If they sell the home before the three years, they will have to repay the credit (with a few exceptions, such as death or divorce.)
The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. You should discuss any tax or legal matters with the appropriate professional.
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