Homebuyer Tax Credit
Tax Credit for Homebuyers
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who
have not owned a home within the last three years) may be eligible for the tax
credit. The credit for FTHBs is 10% of the purchase price of the home, with a
maximum available credit of $8,000. This credit can apply to the purchase of a
foreclosure in Tampa Bay. These properties are not exempt from
this credit.
Single taxpayers and married couples filing a joint return may qualify for
the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a
residence some additional reasons to move to a new home. This incentive comes in
the form of a tax credit of up to $6,500 for qualified purchasers who have owned
and occupied a primary residence for a period of five consecutive years during
the last eight years.
Single taxpayers and married couples filing a joint return may qualify for
the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no
later than April 30, 2010 and close no later than June 30, 2010.
Tax Credit Versus Tax Deduction
It’s important to remember that the tax credit is just that… a tax
credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax
reduction, rather than a reduction in a tax liability that would only save you
$1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were
to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she
would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can
receive a check for the credit if he or she has little income tax liability. For
example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is
liable for $4,000 in income tax, she can still receive a check for the remaining
$4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the
credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit
amount. Those who earn more than this cap can receive a partial credit. However,
single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit
amount. Those who earn more than this cap can receive a partial credit. However,
joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sale price of
$800,000. Visit www.federalhousingtaxcredit.com
to learn more.
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