Jim Walberg Alert: First Time Home Buyer Credit ENDS November 30, 2009!
October 10, 2009 by Jim Walberg · 1 Comment
The American Recovery and Reinvestment Act of 2009 expanded the first time homebuyer credit by increasing the credit amount from $7,500 to $8,000 if the home purchase is completed by November 30, 2009. For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the main residence of the Buyer within a three-year period following it’s purchase.
This is an incredible benefit for first time home buyers in any part of the country, but is especially helpful the Buyers in the East Bay because of the variety of communities and price points of homes that are currently on the market. If a person is planning on buying their first home some time in the next six months, they would benefit greatly by making that purchase NOW! In order to close the escrow on a home by the end of November, it will need to get into escrow within the next week or so.
Here is how it works. First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. But, if the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return.
- Applies only to homes used as a taxpayer’s principal residence.
- Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
- Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
There are still lots of questions that a first time home buyer may have regarding how to take advantage of this credit. The first place they need to start is with a qualified loan professionals. CLICK HERE if you would like to contact several that we have found to be great to work with. Below are just a few of the questions that are being asked with the appropriate answer.
Q. I plan to build a home and occupy it in 2009. Can I claim the first-time homebuyer credit now and use the funds toward the down payment or other ongoing construction costs?
A. No. To qualify for the first time home buyer credit, the residence must be purchased. By statute, a residence which is constructed by the taxpayer is treated as purchased on the date the taxpayer first occupies the residence. (05/06/09)
Q:Â When must IÂ pay back the credit for the home I purchased in 2009?
A: Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009. The obligation to repay the credit on a home purchased in 2009 arises only if the home ceases to be your principal residence within 36 months from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.
Q. Suppose a member of the military who purchased a home and qualified for the credit receives orders to deploy overseas for possibly 18 months. If they sell the home within 3 years from the date of purchase, do they have to pay back the credit?
A. Section 36 does not provide any recapture exceptions for military personnel who are deployed and sell their home within 36 months from the purchase date. If the taxpayer does not sell the residence, then the military deployment may be considered a “temporary absence” and the home may still be the taxpayer’s principal residence if the taxpayer intends to return to the residence after the deployment.
Again…CONTACT ME TODAY if you would like more information as to the immediate steps you will need to take in order to the meet the tax credit deadline.
Related posts:
- East Bay Real Estate News: Housing Tax Credit To Be Extended?
- East Bay Real Estate: Fall 2009 Is The Best Time To Buy Or Sell A Home!
- East Bay Real Estate Update: 2010 Tax Incentive Window Is Closing!
Filed Under: Blog, Buyers, News, Real Estate
Tagged: east bay real estate, First time homebuyer credit, Jim Walberg
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Check out what others are saying about this post...[...] Tax Credit Update From Jim Walberg: Last week I sent out the alarm for home buyers to take action or lose out on the Federal tax credit that is ending November 30th. Today Senate Majority Leader Harry Reid said that the Senators have actually agreed to extend the First Time Homebuyers Tax Credit past November 30th. The proposal on the table has the $8,000 credit extended until April 30, 2010. PLUS, a $6,500 tax credit would be given to homeowners who have lived in their house for the past five consecutive that purchase their next primary residence. The credit would be available to individuals who make less than $125,000 a year, or couples who make less than $225,000. This is $50,000 to $100,000 more than the last income ceiling in order to qualify. A strategy that is being proposed in order to have it accelerate through Congress is by attaching the bill to the one extending unemployment benefits – a smart move by Senator Reid. [...]