first time home buyer

First Time Homebuyer Tax Credit Extended

Oct 29th, 2009
by edsmith.
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According to news reports this morning, the current $8,000 first time home buyer tax credit will be extended for contracts that are consummated by April 30, 2010 and close by June 30, 2010.   Senate negotiators have reached an agreement  that would allow the first-time home buyer tax credit to not only be extended, but expanded as well.
 
The changes are as follows:
 
The current $8,000 first time home buyer tax credit extended for contracts that are fully executed by April 30, 2010 and must close by June 30, 2010.
 
There will be a new $6,500 tax credit that will be available to some “existing“ homeowners who had to move out of their primary residence because they couldn’t sell.  It appears that this may be applied to those who lived in their home for a “consecutive” 5 years out of the past 8 years.  More details to come.
 
The income limits to qualify for this credit are supposed to be raised by roughly 65 percent on average. To qualify, individual first time homebuyers may now earn up to $125,000 and married first time homebuyer couples may now earn up to $225,000. The current tax credit limits are $75,000 for individuals and $150,000 for married couples.

How does the new tax credit work for first time buyers? Can we use the money for our closing cost?

Nov 26th, 2008
by edsmith.
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 There is a formula for determining how much “tax credit” you may actually receive based on your income. The maximum credit is $7,500. It is only a credit on your tax return, so there is no actual cash that can be applied toward your purchase.

 

Worse, you have to pay it back over 15 years (interest free) or when the property is sold. To qualify, neither you nor your spouse may have owned a home in the past three years.