Read the Fine Print on the 8K First Time Homebuyer Tax Credit

Being of the “transition” age where friends are getting married and looking to move out of the city and to the ‘burbs, the real estate topic of conversation lately is focused on buying a first home.  These would-be first time homebuyers have a unique opportunity, not only due to low interest rates and more affordable home prices, but also because of the first time homebuyer’s tax credit .  While these incentives are all very attractive and have already encouraged many to take the plunge (first time buyers currently make up 29% of all sales) many are still confused by the fine print behind the $8,000 tax credit.  To set the record straight on this first time buying perk I have compiled the following list of key tax credit facts:

• Home purchases must close after April 8^th 2009 and before December 1^st 2009
• The tax credit will either decrease the taxpayer’s bill or increase the taxpayer’s return and may be filed in 2008 or 2009 tax return.
• Home must be taxpayer’s principal residence
• Unlike the 2008 tax credit of $7,500 which must be repaid, the 2009 tax credit of $8,000 does not require repayment (unless the home is no longer the taxpayer’s principal residence within 3 years of purchase).
• Keep in mind that the credit begins to phase out for homebuyers whose adjusted gross income is greater than $75K or $150K for joint filers.

I think the main takeaway of the tax credit is clear – if you are thinking of purchasing a new home don’t wait any longer!  Set up an appointment today with a Realtor and start looking at homes on the market.  And remember, the closing date must be before December 1^st, 2009.  If you or someone you know are thinking of buying a home in the Darien, CT area give me a call. I would be more than happy to guide first time home buyers through this exciting process…while putting $8K back into their pockets!

Related Resource:

IRS.gov: First-Time Homebuyer Credit