First Time Home Buyer Tax Credit Explained

Hi,
My name is Kim McLaughlin with Axia Financial. Do you know that A tax credit of up to $8,000 is now avaiable if you are a qualified first-time home buyer and purchase a home before December 01 2009?


Here are some highlights of this program;

1)The tax credit is for first-time home buyers only.
2)The tax credit does not have to be repaid.
3)The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
4)The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
5)Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

How do I claim the tax credit? Do I need to complete a form or application?

Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.

What is the definition of a first-time home buyer?

The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?

The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

For more information about this program please visit http://www.federalhousingtaxcredit.com/
If you or someone you know is a first time homebuyer trying to purchase a home, please pass this information on to them.
I am a licensed loan officer and I have several first time homebuyer programs available. Please feel free to contact me at kimberly.mclaughlin@axiafinancial.com if you have any questions
Thank you
Kim McLaughlin
Axia Financial