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

Partner

I am buying a home with multi units. i will live in half and I am a first time home buyer. My business partner is not. Will I qualify?

Credit

As long as you meet the other guidelines, I don't see why you wouldn't.

, Father On Loan Papers, Husband and I on Deed

Hello, We were just wondering how it goes if my father, who doesn't have a home but it is in my moms name and they are married has signed all loan papers but the agent says we can put our names on the deed at closing and still get the credit since me and my husband will be living there and making payment from our bank account and we have never owned a home! Is this possible, I dont know if i am being jerked around, I s that what they look at the deed? Please help

Family

The rules stipulate you must live in the home for at least 3 years (or have to pay the credit back), make under 175k a year if married, not own a home for the prior 3 years, etc. As long as you and your husband's name are the only ones on the title showing legal ownership, you should be fine.

2 first time home buyers; same house

Me and my boyfriend are buying our first house together this year. Since we are both going to be on the mortgage and this would be our first time purchasing a house would be both qualify for the $8000 tax credit? Meaning, would be both be eligible to receive 8000 each.

Credit

You'll probably have to split it.

mobile home

Every one I talk to is so confused about who qualifies and who doesn't, including my tax professional and my mortgage company. My husband and I just purchased our first home together. I had purchased a moblile home in 1997 and we lived in that in a park until we moved into our house. I have been told by one person that we qualify because the trailer was in a park and we didn't own the land, then I have been told we didn't qualify because I owned the trailer. Has anyone been in this situation and claimed the credit>? If so, what happened? We sent in an ammended return on 4/1 but so far have heard nothing back and I am getting anxious.

Real Property

It all depends if the trailer was considered real property. If it was, then it would "count" as a residence and you wouldn't qualify.

Canadian Married to U.S Citizen

I'm a Canadian citizen working in the U.S on a TN Visa(non resident alien). I currently own a house in Canada but my wife(she's a US Citizen) never was on my Canadian house deed or my Canadian mortgate. I'm planning on buying a house in the U.S and I know that I won't qualify because I'm a non resident alien. Unfortunately, my wife doesn't have good credit so her name won't be part of the mortgage. When we file our taxes next year in in the U.S we will be filing jointly because our combined salaries are under 150,000 and mine is over $75,000 Since my wife has never been on any deeds in Canada or the U.S, and she's never had a mortgage in either country, here are my four questions: 1) Is it a requirement that her name HAS to be on the mortgage for her to get the tax credit? 2) since she has bad credit, what approach can I take so that she can actually get the full tax credit even though her name is not on the mortgage? 3) Is she disqualified from the tax credit because shes married to me and I own a house in Canada?, 4) Hypothetically if she solely owned the house in Canada and she has never in the past bought a house in the U.S or had her name on any deeds in the U.S, and she wanted to buy a house in the U.S, would they disqualify her because she owned a house previously in another country?

Great question

The guidelines state some specific things to qualify. I don't see how ownership of a home in another country would disqualify her, provided she met the rest of the requirements and legally owned the property.

tax credit

HELLO THERE

I JUST PURCHASED MY FIRST HOME MY HUSBANDS NEPHEW HAD TO CO SIGN ALSO TO HELP OUT SINCE MY HUSBAND IS UNEMPLOYED WE HAD TO USE HIM (NEPHEW) IN ORDER TO GET THE HOUSE IS MY HUSBAND'S NEPHEW ENTITLED TO GET ANY OF THE $8000.00 CREDIT SINCE HE IS NOT MAKING THE PAYMENTS AND DID NOT PUT DOWN ANY MONEY HE IS JUST A CO-SINGER WITH 1/10 OF 1 PERCENT OWNER? HOW DO I DO THIS?

Nephew

If he is not living in the property with you, he wouldn't qualify for the tax credit per the regs.

HELP!!!! Please

My wife and I are trying to figure out if we qualify for this tax credit if we buy on contract for deed. We would have title insurance, but not the deed. We will be paying the taxes, insurance, and mortgage, but will not have the deed transferred until we pay in full.
Please Help us find out what we need to do to make sure we qualify for the 2009 Tax Credit...

Purchase

You will need to own it before December 1 and reside in the property.

not on mortgage

My parents are willing to take out a mortgage in their name and give me the proceeds to purchase a home. I'd pay the mortgage, but i wouldn't be on it as a borrower. Would i still be eligible for the tax credit?

Deed

You have to meet all the requirements, including living in the property for 3 years and your name must be on the property deed. As long as you meet the other qualifications and you legally own the property, you should be eligible for the tax credit.

Putting my mom on the deed?

I am thinking of buying a house for my mom to live in during May 2009. I live in California, and she lives in Texas. The house would be in Texas for my mom to live in. If we put both of our names on the deed for joint ownership (my mom's and mine), can she claim the $8000 tax credit? It will be my very first time buying a house, and my income is under the limit. It has been 16 years since my mom has owned a house, so we both qualify as first time home buyers.

Note that my mom actually did NOT file income tax at all in 2008 and would not normally file it in 2009 either, since she doesn't have any income to speak of. Despite having Zero Income, would she be able to claim the $8000 tax credit? I guess she will need to file an income tax form in that case.

Also, we would definitely expect my mom to live in the house for 3+ years, hopefully even 20 more!

Thanks for your help!

Filing

I think only your mother could claim it, since she would be the one living in the property, which is one of the requirements.

Settlement of Estate vs First Time Homebuyer

In the settlement of our family's estate, the family home is soon to be deeded to the 4 remaining siblings, of which I am one. I've never owned a home but my wife and I are currently searching for our first home. I am concerned that I may not qualify for the tax credit if my name appears on the deed of our family's home, which will happen on April 27th, when the estate closes. I have not lived in that home since 1978, so it's not a "principal residence." Should I be concerned enough to remove my name from the deed of our family's house to make sure I don't lose out on the tax credit and other first time home buyer incentives?

Better safe than sorry

I would just to be on the safe side. If you can get it put back on at any time, why risk it?

first time home buyer credit

how long does it take t get this credit? it's not included in your refund is it? my understanding was that itwas a separate credit of $7500.

I am selling a home to a

I am selling a home to a first time home buyer on land contract. Do land contract sales qualify?

I started buying a place in

I started buying a place in aug of 2007. but i didnt work any in 2008. will i qualify. if not can i refinance and qualify

home

Hi! My son in law left my daughter and she is paying the house payment on her own,Now the house is in my husbands name if we put her name on it can she get the tax credit.

Qualifying

If she has been living there and is on the title, no.

tax credit

We signed for a double wide home for our daughter and she pays the payment,if we put her name on it can she get the tax credit.

Filed Taxes in IL, just bought a house in Dallas

Hello,
I have purchased a home in Dallas and I am moving there in one moth. However, my 2008 taxes were filed in IL where I currently reside. Can I still file the amendment in Dallas?
Thank you!

Tax Credit

I heard that if you haven't bought a house in over 20 years you would qualify for this credit is that true yes we do own a home in both our names

My wife and I last summer

My wife and I last summer purchased a home with for $1000 cash. At the time we were not married and had no mortgage or loan on the house. We are now looking to take out a mortgage loan on a home. She is going to be taking the loan out in her name based on my bad credit. Will she be able to qualify for a fha loan and will she be able to get the tax credit for 2009/

ISN'T A MOBILE HOME A MOTOR VEHICLE ?

My 31 year old son bought a 1969 single wide mobile home about 4 years ago. He was told at the time that this was considered a motor vehicle by definition. No lending institutions seem to mortgage old motor vehicles. He paid a total of $19,000.00, financed with a personal loan from a credit union. The entire time he lived in the trailer, it's value depreciated due to plumbing problems and leaks, and it was not safe to live in as time passed due to water intrusion into the electrical wiring. He finally was able to buy a home with family assistance (a bi-level house) in November 2008. The trailer park purchased the trailer back from him for $2,000 to be demolished and replaced. Somehow it doesn't seem that excluding his first home purchase from the home buyer credit is right. He has three children and his fiance for whom he provides.

Correction of home purchase date/Re Mobile Home

Just correcting information in the original question. The Bi-Level closing was in Feb of this year (2009). He also sold the trailer back to the park at that time to be demolished. (Senior moment) Thanks.

On Deed but Not Mortgage

I bought a house just over 3 years ago. The mortgage is in my name only. I signed all the documents at closing. I claim all house related items on my taxes. I added my girlfriend to the deed about 2 years ago, but she is not on the mortgage.

We are buying a new home (which will become our primary residence) in her name and selling our other home. Is she considered a first-time home-buyer? I was trying to be responsible by putting her on the deed, and I'm afraid that move may have lost me $8000.

On the deed

I'm pretty sure you are right. If you added her to the deed, then technically she a part owner of that property and therefore will not be considered a first time home buyer under the guidelines.

refi?

My boyfriend and I were mid qualify when they pulled me off of the loan due to credit card debt. He qualified better by himself at the time. I was waiting for funds to pay off my credit cards but said funds did not arrive in time so I was removed from loan. We were told at the time by the loan officer that we could do a streamline refi in 4 months and add me to the loan and title and that then I would qualify for the credit and could claim it on my 2009 tax return. He is not first time buyer but I am and this is now our primary residence together. We are not and have no plans to be married. He closed in mid march. Is this true? When we refi and add me in july 2009 will I qualify for the credit?

Tax Credit

My fiancee & I just closed on our condo March 20th 2009. My name was not on the deed or mortgage when we closed, however, we are in the processing of adding my name to the deed. He is not a first time buyer but I would be. Would I qualify for the 8,000 tax credit even if my name was not on the deed at closing??

IRS

You'll need to speak to a tax attorney. If the house is already in his name, he would probably have to 'sell' it to you. If he just added you to the title, I don't think you would qualify for it under the guidelines.

Sold a house in summer of 2006...do I qualify?

I sold a house in 2006. In looking up the definition of a first time home buyer, it says you can't have owned in the last 3 years. I'm buying a house in 2009. When does the clock actually reset for me? 2009, or 2010?

Depends

You just need to count out 36 months from the date you sold your home. If it was early enough in the year, you should be ok.

New Home questions

Hello! Thanks for your patience replying to all these comments! My boyfriend has owned our home (by himself) for a few years. We just refinanced last month to add me to the mortage and the deed. This is my first time owning a home, but it isn't exactly a "new" home. Would I be able to claim the credit? Obviously my boyfriend couldn't, but could I?

Thanks-

You have to buy the house

The guidelines stipulate that you buy a house. I doubt refinancing or adding you to the deed would be sufficient. A tax attorney would probably be able to tell you for certain.

Mobile home question

My husband and I currently live in a mobile home that was given to us by my father-in-law. The home was given to us in 2006 and it has been our primary residence since that time. We do not own the land that it currently resides on. We have never purchased a home or had a mortgage. We are in the process of purchasing a new construction home and will be closing next week and are wondering if we are eligible for the first time home buyers tax credit. Thanks.

do I qualify

I bought my house on Sept of 2007. I heard a rumor that I can still qualify to receive the tax credit this year since I was a first time homebuyer? is this true?

Do we qualify?

I bought a house in 2004. I was not married at the time. I no longer own that home as of 2007. I am now married. My husband has never owned a home. Can we still qualify with him as the lead on the loan?

AMMENDMENT 1040X

I MAILED OUT MY AMMENDMENT 1040X ON MARCH 23RD. WHEN WILL IRECEIVE MY CHECK IN THE MAIL?

If I buy on a contract for deed.

If i buy on a contract for deed does that qualify for 8k rebate

divorced now first time home buyer

i got divorced in 2007 sept . my ex had a home and i was not on title as i was not on mortgage too. however i did sign transfer of title paper on the divorce hearing date .

i just bought a house in feb 2009. for me this is my first home and mortgage too .

tell me if i will qualify as a first home buyer !

i bought a home on september

i bought a home on september 2008. i already filed my taxes can i stioll aplly for the first time buyers tax credit ??

i bought a home on september

i bought a home on september 2008. i already filed my taxes can i stioll aplly for the first time buyers tax credit ??

Marital status? and is there still time to amend taxes??

My fiance and I both filed our taxes for 2008 back in February before we knew about the $8,000 tax credit. On March 6, 2009 we closed on our condo. A week later March 10, we were married. We're both first time homebuyers using the condo as our primary residence and we're under the income bracket.

A few questions- Would we receive the full $8,000 even though we got married after closing? Does the tax credit apply to condos? Would we have to file our amended taxes before April 15, 2009 in order to get the credit this year?

Tax credit

My husband and I got married September 2008, he owns the home we live in but we are planning to purchase a new home this summer. I will not be primary on the loan, he will be, but since it is my first time buying a home would I qualify for the First time home owner credit?

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