When Congress passed the American Recovery and Reinvestment Act of 2009, it included a provision offering a new tax credit for first-time home buyers. This new home tax credit is an amazing opportunity for anyone who’s thinking about buying a new home. Under the act, you can get a tax credit of up to $8,000 when you buy a new home in 2009.
How exactly does this new home tax credit work? There are some pretty specific requirements you have to meet in order to qualify. The good news is that many people can qualify.
For starters, the new home tax credit is available only to first-time home buyers. According to the IRS, a first-time home buyer is someone who has not owned a principal residence for the three years prior to the purchase of the new home.
The amount of the new home tax credit can vary. The tax credit is calculated based on 10 percent of the purchase price of the home, with a maximum of $8,000. So, a new home that sells for $65,000 would qualify for a $6,500 tax credit under this act.
This is a tax credit, which means that it does not have to be repaid. It is available to most people, including single taxpayers that have an income of $75,000 per year or less, or married couples with an income of $150,000 per year or less. If your income is over those amounts, you can still qualify for a reduced amount of the 2009 new home tax credit.
The one downside to this tax credit is that it ends soon. To qualify, you need to buy your new home prior to December 1, 2009. There has not been any talk of extending the program beyond that date, and it’s not likely that congress will be passing another bill to offer the same kind of incentive any time soon.
Don’t let this opportunity pass by. With interest rates lower than they’ve been in four decades and with home prices at levels we haven’t seen since 2003, right now is the time for you to buy your new home.
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