First Time Home Buyer Tax Credit

There has been a lot of talk (and confusion) about the economic stimulus bill and what it means to home buyers. Who qualifies? What year can I claim the credit? How much of a refund would I get back? What are the criteria to receive the credit? So I'm going to attempt to answer the most common questions about the bill. Keep in mind, I am NOT a tax professional or accountant and always recommend when it comes to your taxes to seek the advice of an accredited tax professional.

That being said, the bill states that first time home buyers can claim a tax credit worth $8,000 OR 10% of the home's value, whichever amount is less. So, if you bought a condominium for $65,000, your tax credit under the bill would be $6,500, not $8,000.

Qualifying

In order to qualify for the credit, the home purchase must be made between January 1st and November 30th of 2009 (so if you buy a home on December 1, 2009 you are not eligible). In addition, there are income restrictions as well. To qualify, a single person must make less than $75,000 a year. Married couples must make under $150,000 a year. However, higher income buyers may receive a partial credit. You must also live in the house purchased for at least three years or you will be required to pay back the credit. The property being purchased can not be owned by a close relative like a parent, grandparent or one of your children. The definition in bill for a first time home buyer is anyone that has not owned a home in the last three years.

Tax Filing

The credit can be claimed on your 2008 or 2009 income taxes. Now as I said you can claim the credit on your 2008 tax filing. If you have already filed them, you can file an amended return to claim the credit if you wish to do so. Based on the feeback we've been getting, the process takes about 12 weeks. Another great thing about the credit it that it is fully refundable, so even if your total tax bill (refund) is less than $8,000 (and you qualify for that amount of a credit), you would still receive the full $8,000 back plus the amount you had overpaid.

For example, John's taxes showed that he had paid $5,000 in taxes over the year. He filed his return and he actually only owed $3,000 in taxes. Normally he would have received a refund of $2,000. But under this bill, he would receive the full $10,000 instead! To claim the credit on your taxes is just a matter of filling out the form, without any additional paperwork involved.

This is a simplified breakdown of the economic stimulus bill. I highly recommend consulting a professional tax service regarding your taxes. You can download the tax form here: http://www.irs.gov/pub/irs-pdf/f5405.pdf

Thank you for reading our real estate blog and feel free to contact us for all of your Las Vegas NV real estate needs.  

Source: CNNMoney.com

Comments

How long does it take to get credit?

I read that it takes 12 weeks from the IRS to get $8000. I hope it doesn't take longer for us, we are closing on our house next week and really need it.

Refund time

We are in week 11 and still no check. The IRS told me that they are currently swamped and trying to push them through ASAP because they are gaining interest as they sit there. I was unaware of that, but that is what I was told. I filed my amendment around May 1 and was told I would hear something by August 2. This is so aggravating!

Also waiting

I filed for my tax credit in May and was told it would be about 6-8 weeks... this is mid July and still nothing. I am in the same boat. I spent money, ran up credit cards, and overspent thinking this money was coming and would save me. The house I bought needed work but I figured it would be okay since this money would be coming. Now, the creditors are calling and I am seriously struggling to pay enough to not ruin my credit and still by grocreys. Someone should have either told, first time buyers like me, that this credit may take a long time with an estimated arrival date or not allowed us to ammend in hopes of getting the money before the end of the year. I am just hoping I can stay afloat.

Do not EVER

Ever ever ever count on the fed for money. "Someone should have told me" is not an excuse. You racked up credit with the assumption that the feds would pay it off for you. Be a responsible adult and get a second job to pay your own debt.

Everyone here would be thrilled to receive $8000 for buying a home, but not one of us deserves it. That is someone's money coming from somewhere and it is this attitude of entitlement that will destroy our nation's economy.

do not ever

i agree...we are thankful to get this "free money"....and are being positive and patient. We sent our amendment in mid may..still waiting. I would never spend money I dont have....

Yeah, we filed for our's

Yeah, we filed for our's June 11th. Still waiting. A friend said she filed hers with her taxes and recieved everything in 4 weeks! I was hoping that it would be the same for us, but nothing yet. We really need that money. We were told we couldn't file for the credit until after closing on our house! Our oven is broken and we are waiting to fix that until we get the check. I'm so tired of eating burnt food!

Can I Collect on First-Time Homebuyer and Energy Efficient

I am a first-time home buyer and will qualify for the $8000 refundable tax credit. I am also replacing some windows in the home and will qualify for the energy efficient tax credit. Let's say that at the end of the day I owe $3000 back to government. Therefore I will get $5000 back. However, let's say I qualify for all $1500 in the energy efficient tax credit. Does that mean I will get $6500 back?

Tax Credit

Under the regs, that's exactly how it should work, provided you qualify for both. Because you are claiming both, I would recommend you have your taxes professionally done.

WHO FILES WITH THE HOUSE IF WITH PARENT

My husband doesnt qualify for the first time home buyers credit because I have a house. Although my mom will be moving in with us and him and her are purchasing a house togethr, not with me cause im not working . Who would file the house on their taxes and would she qualify for the tax credit even if he doesnt. Will she have to claim the house on her taxes and not him???????

During my previous marriage,

During my previous marriage, my name was on the deed but not on the mortgage. My name was taken off the deed in January 2007. I remarried in May 2009, and we would like to buy a new home together. Do we qualify for 8000 tax credit?

Gifted home

I am on the cusp of finishing escrow. My question is: In Dec. of 2008 my parents gifted me their house. It has not been my primary residence in over 25 years. Will i still qualify for $8,000 tax credit.

Townhouse

My fiance purchased a Townhouse in 07/07. The property is considered a condo. He is now in the process of purchasing a house. Does he qualify for the tax credit seeing as to his first purchase was a condo and not a house? Also do you know of any other programs or grants that he might quilify for in the state of illinois? his income is under 75,000 and is a chicago police officer.

Condo is a home

no because he still took a mortgage out.

FHA Loans

Am I misunderstanding this credit? Do you have to have an FHA loan in order to qualify for the tax credit or do VA and conventional loans also qualify?
Thanks to anyone who has the answer.
Happy 4th all...
God Bless America

yes you can have a V.A loan

yes you can have a V.A loan . My husband and I just bought our house in june and we have a V.A.

Eligible!

I just recently purchased my FIRST home (!!!!!) with a conventional loan.
I have amended my 2008 taxes and am eligible for the credit!

There are no restrictions in the bill for the type of loan used to purchase your first home.

Relative problem

This relative problem is reallllly annoying. We have been holding a house specifically for my daughter to 'buy' when she graduates college. This would be perfect for her, an $8000 credit right off the bat. But because she is 'related' she does not qualify ??? Come on folks, this is a windfall for all the housing industry, why exclude relatives, their money is just as green as a non-relative. There has to be someone out there in the government working on a 'relative' amendment to this problem - - does anyone have any insight into this ??

Because of Fraud

One word. Fraud Prevention. Think about it. If you could sell a house you own to a relative and then they could claim the $8,000, then everyone would sell their house to their child,niece, nephew, uncle, some cousin that never owned a house, still live in it and collect the $8,000. You are saying it right in your message. You put quotes around "buy". Is your daughter getting a mortgage? or are you selling the house for $1. Think about all the fraud that already has occured because of this.

Can you qualify if you refinanced in 2009?

My question is can you qualify for the tax credit if you refinanced your home in 2009. Making it a new loan.

Homeowner

YOU AREN'T A FIRST TIME HOME BUYER IF YOU CURRENTLY OWN A HOME OR HAVE OWNED A HOME WITHIN THE LAST 3 YEARS.

Or if that was your

Or if that was your principal residence. If it is a rental property and you haven't lived in it for the last 3 years you would qualify as first time home buyer, right???

Refinance

I believe that is correct. But you still wouldn't be eligible if you are refinancing an existing loan.

I should be eligible for the

I should be eligible for the tax credit but my problem is that I would like to hire a contractor to build the house for me and we still have not started construction. It is July and the home would not be finished until well after next year. If I own the lot and am currently building the house when December 1 arrives, can I still qualify for the tax credit?

No, you have to actually

No, you have to actually occupy the house by the Dec '09 deadline.

You need to close on the

You need to close on the house I believe. Unless you got the construction loan in your name. That should count.

Primary Residence

I own a mobile home. I know that that constitutes a primary residence, but I am in the military and have not lived in the trailer house anywhere near 50% of the time over the last 3 years. I bought the house in 2002 while I was in college and have kept it just to have somewhere to stay while I'm not moving around the world. It's been almost a year since I have even been there. The problem is that I haven't really had a real primary residence. I keep my mail there and just have it forwarded to where ever I might be at the time. I think that I would qualify for the tax credit, but want to make sure before I do. Any thoughts?

No.

Have you owned a home in the last three years? Yes you have. so you don't quality.

First time buyer

Dear Sir/Madam,

I am eligible first time buyer,
I am married and live in my father-in-laws house,
My father-in-law wants to sell his house,
Can i buy my first home from him ?
Do i have to be the only person listed on title to get the tax credit or i can add my wife as well ?

Thanks,

Jay....

No, you will not be able to

No, you will not be able to get it, You can not buy the home from family, and I assume that also means in laws.

my guess is no as it is your

my guess is no as it is your wifes father. and the above states that you will not qualify if you buy the home from a relative like a mom dad son daughter. it looks as though if you can not qualify if a spouce has a house and you do not, and you go to buy your first home you can not qualify simply due to the marrage and your spouce already having a home. just a guess but it makes sence.

No 1 has ansered this question, It has been asked about 30 times

My Wife and I just got married, 2 years ago she owned a home. I have never owned a home. We just bought a new house and the title and loan and everything is in my name... do we qualify for 8K, 4K, or nothing? We live in NYS so I am assuming the marital money thing is involved here, but i am not sure. Has anyone had experience with this (in any state)?

I know about 30 others want to know too

From what I have read, if

From what I have read, if either of you owned a home within the last 3 years you do not qualify

Ineligible

Simple answer is no. Your wife doesn't qualify as a first time buyer because she owned a home two years ago and the guidelines stated in the post state a first time home buyer is defined as anyone not owning a home for the past 3 years. Bottom line, you can't claim the credit if your spouse owns a home or has owned a home within the last 3 years per IRS 5405.

Mobile Home question

Hi,
My husband and I purchased a mobile home from a individual last year for $4500. There was no deed or mortgage, just a Bill of Sale that has never been recorded or seen the light of day for that matter. We do not own the land that the mobile home sits on. We do not pay land taxes, but we did have to register with the county courthouse in order to receive utilities-so we do pay taxes on the mobile home. We are purchasing what I would consider our first home within the next few weeks. I am just wondering since there is no deed, no mortgage, and we do not own the land-are we eligible for the tax credit? I am guessing there would be no actual record of ownership.
Thanks

I believe it would be like

I believe it would be like the purchase of a car if it has a bill of sale. I assume you would be able to get it if you buy a house but I am not 100% sure, call a realtor or a professional tax assessor

Does Moblie Home purchase Count as previous homeowner?

I am in the exact same boat. I was going to email my realtor to get an answer. They are the ones who would find out, since a future sale hangs in the balance. If you pay taxes on the structure, like I do, then they know the value of the mobile home. My biggest question was, like you, I never had a mortgage loan. I purchased mine in 2001, for 35,000. Back then we didn't even pay property taxes because a permit was all that was required. Since then the laws have changed. I am hoping that I will qualify, and I think that if anyone could find a loophole, it would be a realtor. I have heard that in 2010, congress hopes to raise the credit, even up to 15,000. If they want this stimulas to work, they have to keep it going. I'll keep you posted if I learn something new. Good Luck.

Mobile Home

I just spoke with IRS agent and she said that whether or not a mobile home is on leased or owned land, if you owned it in the last three years you do NOT qualify for the tax credit.

Marriage After Home Purchase

My boyfriend and I are purchasing a Condo. We will be closing in September '09. At Closing we will NOT be married. We are not getting married for a few month after closing (November). He is the primary on the Loan and I am co-signer. I have previously owned a home in the last 3 years but he has not.

Will we be able to qualify for this Tax Credit since we weren't married at closing, but we will be "married filing separate" on our tax return this coming year?

You are not eligible. But he

You are not eligible. But he is. Two unmarried individuals may allocate the credit in a reasonable manner. A reasonable manner is any manner in which the credit does not go to an ineligible party. Thus, he gets all. U get 0 cause u owned a home in last three years.

Amendment

You probably should talk to your tax advisor. He could always file an amendment to his 2008 return before you get married to claim the credit. All of the other requirements would still apply, like living in the property for 3 years.

Tax credit

I bought a mobile home 4 years ago from a friend. We did not go through a lender, but borrowed money from a friend. It was purchased for a little over $12k. We paid it off. My wife is not on the tax statement.
We are looking to buy a new mobile home but don't know if we would quaify since it was purchased through a private lender and has been paid off for a year now.
Since my wife is ot on the title for tax purposes, would she qualify if we purchased the home in her name?
I claimed some small tax credits since I ran my business through the home (approximately $200 a year).

Military

I know its probably already been asked but... I'm military and bought a house in 2009, and filed for the 8000$. But does anyone know, if I get orders out of here and have to sell the house, do I have to give back the money?

Yes, you'll have to pay it

Yes, you'll have to pay it back military or not. you have to have the home for atleast three years before you can sell it. i am also in the military.

Military

So, I am not military, but I am getting ready to marry into military. I bought my first home on my own and received the tax credit. My fiance is deploying for Iraq for a year and then we will be moving to Hawaii to get married. Can I rent my place out for three years so that I do not have to pay back the 8000?

Special Military rules

Wow Mike, that is a great question. In a perfect world, I think because you are not given a choice that the rules for you would be different. I've looked over the IRS informaiton and haven't found anything regarding special dispensations for active military personnel (yet).

The only thing I can think of, other than of course recommending you talk to a tax attorney is writing a letter to your state representatives. I think they would be happy to help one of our soldiers get his question answered.

Please feel free to check back often, because we do have professionals that also post answers here. If I find out something sooner, I will email you directly. Thank you for your service to our country.

Glendale

I wonder how this credit is effecting sales in the US. I know here in Glendale we're seeing a lot of first time home buyers.

Divorce

My ex-wife purchased a home in her name only while we were married, i was not on the deed or mortgage due to credit issues. We did take out an equity loan for some repairs and i was a co-borrower on that, we have since divorced and sold the house in 2007. If I purchase a house this year would I qualify for the credit since I was not on the deed or mortgage. I dont know how state law could affect Federal tax laws. This was in Pennslvania if that matters

Do we qualify?

We signed on our house in AZ on March 20, 2009. We do own a house in NY but we moved to AZ in 2006 and have not actually lived in the house in NY since November of 2005. My cousin is staying in our house in NY now, taking care of it for us, but we do not charge her rent. She does the upkeep on it and we stay there when we go back to NY for vacations. The electric, phone, etc are all in her name. Do we still qualify for the credit since it has not been our primary residence in over 3 years?

Purchasing a primary residence out of state

I moved from CA to DC. I still own a home in CA where I rent it out. However, I am in the process of purchasing a new abode in DC. I wonder if I qualify for the credit. I wish they had no stipulation and made it available for anyone who purchases a house. Bloody hell as it is Uncle Sam takes enough to fund his stupid programs.

Actually, you are still

Actually, you are still eligible to claim the credit ONLY if you haven't lived in your CA home within the last 3 years. I am in a similar situation and felt like I couldn't get a straight answer from anybody. I got my question answered directly from the IRS website. They have a link where they provide examples of certain situations and then answer if you are eligible or not. I will post the link soon.

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