New Federal First-Time Homebuyer Credit!

Although the current state of our national economy and housing market creates problems for many people, there also are benefits created for many others! The American Recovery and Reinvestment Act recently enacted by Congress has specifically targeted first-time homebuyers as a group in need of assistance with respect to home ownership.

Key features of the new law are as follows:

Definition of First-Time Homebuyer: Buyer (and buyer’s spouse) may not have owned a principal residence for three years prior to purchase.

Amount of Tax Credit: 10% of the purchase price or $8,000 whichever is less.

True Credit or Repayment: True credit—unless the home is sold within three years, at which point the first-time homebuyer (who is now the seller) must repay the entire amount to the IRS at closing.

Effective Dates: Applies to homes purchased between January 1, 2009 and November 30, 2009.

Tax Implications: Reduces (or can eliminate) income tax liability for the year of purchase; e.g., buyers will pay less tax or receive a bigger refund.

Eligible Properties: Any single family residence (including condos, co-ops, townhouses, etc.) that will be used as principal residence.

Income Limits: Full credit for individuals with a modified adjusted gross income of $75,000 or less ($150,000 on a joint return); partial credit for income from $75,000 to $95,000 ($150,000 to $170,000 on a joint return). The credit can be claimed on your 2008 or 2009 tax return.

As a result of the current market condition of low interest rates and reduced home prices, combined with the new Federal Tax Credit, an environment has been created for first-time homebuyers that has not been seen in many years.

For more information about the new Federal first-time homebuyer credit please see our website at www.nevadacounty4sale.com/buyertaxcredit.

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