Explanation of the First time home buyer tax credit
If you haven’t heard Uncle Sam is giving away up to $8000 if you buy a house this year. What that means to you as a tax payer is that you are going to get money back on your tax return. Let’s say you get $800 back on your tax return usually. Next year you would get $8800 back. A check for $8800 made out to you!
If you get $1500 back you would get $9500 back. They call it a tax credit but it means $8000 to you. Plus you will now be getting tax deductions for the mortgage interest you pay, and the property taxes you pay.
Here are some of the points to remember to qualify the the first time home buyer refund
First-time home-buyers (if you haven’t owned a home in the last 3 years you would also qualify as “first-time” home buyers) Buyers must make less than $75,000 when filing single or $150,000 for married couples. (Home buyers who make more than $150,000 would receive a partial credit.) The purchase of the home must be made between Jan. 1, 2009 and Nov. 30, 2009. So you have 7 1/2 months to buy a home. The Metro Detroit home buyers must live in the house for 3 years or more, or they will have to pay back the tax refund. The refund amount is $8000 or 10% of the home’s value – whichever one is less. For example if you buy a $65,000 house you would only receive $6500. If you buy a $150,000 house you would only get $8000. The max you can get is $8000. But if you buy below $80,000 you are only going to get 10% of the purchase price.
One item I have learned is that if you recently got divorced and your name was on the other house you do not qualify for the tax credit. If you are married and your husband has a house in his name you can’t get a tax credit on a new house.
You cannot purchase a home from someone is related to you like spouse, or father, mother, grandparents and get the first time home buyer tax credit. But purchasing from a sibling, nephews and nieces is okay to qualify for the first time home buyer tax credit.
If two or more individuals are buying a house the first time home buyer the tax credit will be split up between qualifying individuals.
I hope this helped you understand Mr. Obama’s home tax credit.
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