As stated in the Worker, Homeownership, and Business Assistance Act of 2009, new or first time home buyers can qualify for a tax credit. The tax credit will be equal to ten percent of the home’s purchase price up to a maximum amount of $8,000.
A new home buyer or first time home buyer is defined as a buyer who does not own a principal residence for three years before this particular purchase. For married taxpayers, both the buyer and the spouse’s home ownership history will be checked.
Taxpayers’ dependents and those younger than 18 years of age are not eligible for the tax credit program. Also, the tax credit is applicable only to homes not more than $800,000, and will be paid back if the property is sold or once it is no longer the buyer’s principal home within three years after it was acquired.
If you bought your house between 01 January 2009 and 06 November 2009 then you have to earn less than $75,000 if you are single and $150,000 if you are married. On the other hand, if you bought it after 06 November 2009, but before 30 April 2010, then the corresponding income limits are $125,000 and $225,000 depending on your personal situation.
Naturally, there is some paperwork that needs to be filled out when applying for these credits. You will need to fill out the IRS Form 5405 and send this in with a HUD-1 settlement form.
In cases where the HUD-1 does not apply, one can use a copy of the certificate of occupancy instead. For purchases made in 2010, the buyer has the option of claiming the credit on either the 2009 or 2010 tax return.
In order to be eligible for the tax credit, the transaction should have taken place between 01 January 2009 and 30 April 2010. If the binding deed of sale was signed by 30 April 2010, it must be consummated on or before 30 June 2010.
Proposals have been made recently for an extension of the deadline to be moved to 30 September 2010. Various real estate groups have claimed the new tax credit scheme has resulted in a major rush of real property purchases, which led to a huge backlog of sales completion.
This individual has been publishing commentary pertaining to tax relief for the past three years. In addition, the writer is fond of publishing articles with respect to New York City neighborhood topics, like Midtown homes along with Sutton Place apartments.
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