Alex Carbajal

First Time Homebuyer's Tax Credit

My big question of the year is why are more people not taking advantage of the potential to receive up to $8000 just for buying a home? I am not sure if it is because people are still scarred from all of the negative news that the national media continues to put out there or if it's because people really don't know about what this program is an how it works.

Well I would like to take this opportunity to put some additional information regarding the tax credit out there.

1. What is the tax credit? - This is a real credit that is being given to first time home buyers. You can receive up 
                                        to 10% of the purchase price, maximum of $8000

2. Who qualifies? - This is awesome, if you are a first time home buyer you qualify. First time homebuyer is
                            defined as someone that has never owned a home OR someone that has not owned a home 
                            for at least 3 years.

3. When do I get the money? - This is another fantastic thing about this credit. You can either wait to receive
                                             your credit when you file your 2009 taxes OR if you would rather not wait you
                                             can file an ammendment for your 2008 taxes and get you credit now!! All you
                                             have to do is fill out form 5405.

4. Is this a true credit? - YES, YES, YES, if you owe money then the credit will pay the government for you. If
                                    you are getting money back then you will be getting up to an additional $8000, real
                                    money, back with your return!!! The best part of this credit is YOU DO NOT HAVE TO
                                    PAY IT BACK!! *If you sell your home before 3 years then you do have to pay back.

5. Are there income limits? - This answer I took directly from the IRS website. Yes. The credit is reduced or
                                          eliminated for higher-income taxpayers. The credit is phased out based on your
                                          modified adjusted gross income (MAGI). For a married couple filing a joint return,
                                          the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out
                                          range is $75,000 to $95,000. This means that the full credit is available for married
                                          couples filing a joint return whose MAGI is $150,000 or less and for other
                                          taxpayers whose MAGI is $75,000 or less.

6. Is there a time limit? - Yes, you have to close on your new home BEFORE Dec. 1, 2009.

So, there are some answers to some of the most asked questions regarding the $8000 first time homebuyer's tax credit. This is a great program available to buyer's that is coupled with interest rates being at an all time low and in some 100% loans still available. Imagine buying a home in an area where you get a 100% loan, no PMI, an interest rate of 5% and $8000 in cash - I can't imagine a better situation besides getting a home for free but how many times does that happen?

Feel free to contact Team Carbajal for all your Real Estate needs.

Published Monday, May 11, 2009 7:22 AM by Victor Garcia