A tax credit is obtainable for qualified first-time home buyers buying a principal residence on or after January 1, 2009 and sooner than December 1, 2009.
The tax credit is equal to 10 percent of the home�s purchase price up to a maximum of $8,000.
The First-Time Home Buyer Tax Credit is part of the American Recovery and Reinvestment Act of 2009. In it, Congress authorized a first-time home buyer tax credit of up to $8,000 for home buyers who qualify. The program's goal was to stimulate first-time home buyer's to buy a home, by most measures, the plan has has work just fine.
If you're planning to demand the $8,000 First-Time home buyer tax credit and haven't bought a house yet, you might be running out of time. You have got to be closed on your new house on or prior to December 1.
Since closing escrow can take up to 60 days, your $8,000 tax credit is in danger unless you open escrow prior to October 2, 2009.
First-time home buyers represent aproximately one-third of all home sales.
The law defines "first-time home buyer" as a buyer who has not owned a primary home for the period of three-year period previous to the acquisition.
Now, not all first-time home buyers qualify for the $8000 credit.
Here are some exceptions:
* File taxes individually and whose adjusted gross income is more than $95,000
* File taxes jointly and whose adjusted gross income is more than $170,000
* Purchase property from a mother, father, sibling or child
* Buy property from an entity in which they're a majority owner.
* Buy the home by gift or inheritance
Let's say that you qualify and that you go open escrow before October 2nd and close before December 1st, the good news is that it's easy to demand your tax credit. All you have to do is:
1. Purchase and close on a new, "main" home before December 1, 2009.
2. File IRS Form 5405 with your 2009 tax returns in April 2010.
And you are good to go.
