$8,000 Tax Credit for First Time Homebuyers

Note: THis is intended to provide an overview only-for specific information or individual concerns,please contact your lawyer.

Congress has recently passed a federal income tax credit for first-time homebuyers that is the lesser of either 10% of the home's cost or $8,000.
This will be available to qualified first time home buyers for the purchase of aprincipal residence between January 1, 2009 and before December 1, 2009.
for example:

*The tax credit is available for first time homebuyers or those who have not owned in the last three years.

*The credit does not require repayment (unlike the 2008 iteration of the credit) The credit will be claimed on a tax return to reduce the purchaser's income tax liability. n If any credit amount remains unused, than the unused amount will be refunded.

*If the home is sold within three years of purchase, the entire amount of credit is recaptured on sale.

This measure can help to significantly lower housing inventory, bring stability to home values and move the country closer to economic recovery.  Many industry experts have said that the tax credit for first time homebuyers could result in up to 300,000 additional home purchases each year.
The following provides more information:

AMOUNT OF CREDIT:  The amount of the homebuyer federal income tax is lesser of 10% of the cost of the home bought or $8,000

ELIGIBLE PROPERTY:  Any single-family residence (including a condo, co-op, or townhouse) may be eligible property under the homebuyer income tax credit, provided it will be used as the homebuyer's principal residence.

REFUNDABLE:  This homebuyer income tax credit reduces income tax liability.  The $8,000 tax credit is a clean refundable credit, unlike the one that passed last summer, which reequired a repayment. If you qualify as a first-time buyer (i.e, haven't been a homeowner in the past 3 years), than you will get a refun check for the difference. EXAMPLE: You owe $2,000 in taxes on April 15,2010. But if you bought a home before the stimulus expiration on Dec. 1, 2009, then you will get a tax refund check for $6,000
frjom the IRS*

INCOME LIMIT: In  order to be eligible for the homebuyer income tax credit in full, the homebuyer can have an annual adjusted gross income of no more than $75,000 ($150,000 on a joint return)  A homebuyer with an annual adjusted gross income above that level and up to $95,000 ($170,000 on a joint return) is eligible for a reduced tax credit.

FIRST-TIME
HOMEBUYER ONLY:  The homebuyer income tax credit is designed for first-time homebuyers, which means the homebuyer (and/or the homebuyer's spouse) can not have owned a principal residence in the 3 years prior to the purchase of the eligible property.

REVENUE BOND FINANCING: A homebuyer who utilizes revenue bond financing may be eligible for the homebuyers income tax credit.

REPAYMENT: There is no repayment of the homebuyer income tax credit by the homebuyer.

RECAPTURE: However, if the eligible property is resold within three years of purchase, the entire amount of homebuyer income tax credit is recaptured on the sale.

EFFECTIVE DATE: The First-Time Homebuyer Federal Income Tax Credit is effective for purchases on or after January 1, 2009 and before December 1, 2009. This guide reflects a modification from the First-Time Homebuyers Federal Income Tax Credit, which remains in effect for homes purchsed by eligible homebuyers between April 9, 2008 and Dec. 31,2008