Government Tax Credits For Homebuyers Clarified
INDUSTRY NEWS, REAL ESTATE LEGISLATION, TIPS FOR BUYERS
March 11th, 2009
Efforts to get the housing market back on track have resulted in three 
distinctly different tax credits from state and federal government agencies. Here is a summary of the three incentives:
- First-time buyers that bought a home April 9,2008 to December 31, 2008 may qualify for a $7,500 tax credit enacted as part of the Housing and Economic Recovery Act of 2008. This “tax credit” must be repaid at $500/year over 15 years.
- First-time buyers that buy a home between January 1, 2009 and November 30,2009 will be awarded a $8,000 tax credit that can be applied to their 2008 or 2009 Federal Tax Return. No repayment is necessary unless the buyer disposes of the property within 36 months or it ceases to be their principal residence.
- Anyone that purchases a brand new home (never occupied) may qualify for up to $10,000 state tax credit if purchased (escrow closes) between March 20, 2009 and February 28, 2010. The credit is 5% of the purchase price or $10,000, whichever is less. The credit is spread over 3 years. If your tax obligation to the state is less than the tax credit, there is no carryover or refund of the difference.
Numbers one and two have income limitations and first-time buyers only are eligible, neither conditions apply to number three. A first-time buyer is defined as an individual that has not owned a home in the past three years.
The tax credits have plenty of conditions and exceptions, so it’s a good idea to consult with a tax professional before assuming a credit will apply to your personal situation. The funds are limited for the state tax credit. Buyers need to apply for the credit within 7 days of close of escrow. There’s $100 million total available funds in the kitty.
Buyers can also combine the federal and state tax credits for a new home purchase. Contact me for details on any of these programs.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
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