First Time Home Buyer Programs
Do you own your own home or are you thinking about buying a home? If so, the first time home buyer program created by the U.S. government might be a good incentive to buy now, which of course was its purpose. It was created to increase housing sales and in so doing attempt to steady our unstable housing market which had plummeted. Initially, the program was designed to end in 2009, however due to its success, the Worker, Homeownership, and Business Assistance Act of 2009 extends and expands the home buyer credit allowed by the previous act. This act has increased the deadline to buy a new home to April 30, 2010 while allowing time to close on the home by June 30, 2010. The new law also authorizes credit for long-time homeowners in the hope of encouraging them to replace their principle residence. It also raises the income limitations for homeowners claiming the credit.
If you are a first time home buyer, a tax credit of up to $8,000 is available if you are purchasing a home on or after January 1, 2009 and on or before April 30, 2010. Be aware though that married couples are not eligible to claim the first-time home buyer tax credit if either spouse has previously owned a home. However, if that is the case, you may qualify for the repeat home buyer tax credit. If you are a repeat home buyer, a tax credit of up to $6,500 is available to those houses sold after November 6, 2009 and on or before April 30, 2010. Be aware though, that in order to qualify for this tax credit, you have to have owned a home for five consecutive years out of the prior eight years. Remember that the $8,000 for the first time buyers and the $6,500 for the repeat home buyer is the maximum amount of tax credit that will be awarded in each situation. The tax credit given is based upon the price of the home and the buyer’s income.
As previously stated, the income limitations have also changed. An income limit of $125,000 for individuals and $225,000 for married couples filing jointly apply to all sales that happen after November 6, 2009. This is a great increase from the previous limitation of $75,000 for individuals and $150,000 for married couples, which was the level established between January 1, 2009 and on or before November 6, 2009.
Also, this act has been written so that neither the first time home buyer tax credit nor the repeat home buyer tax credit have to be repaid unless the home is sold or ceases to be used as the principle residence within three years after the initial purchase date.