What is this First-Time Homebuyer Federal Tax Credit?

It is a temporary First Time Home Buyer Tax credit to provide a housing stimulus for first-time home purchases that occur between Jan. 1 and Dec. 1, 2009. The best thing about this new Tax Credit versus the previous one, other than the increase from $7500.00 to $8000.00, is that it does NOT have to be repaid. Combine this credit and also other tax benefits of owning a home today, a first time home buyer would actually make money buying a home vs. renting!!

I know this sounds too good to be true, so you ask what is the fine print and what does it mean to me?

So here it is in a nutshell:

• To qualify as a first time home buyer as defined in the program, the purchaser may not have owned a home in the three years prior to the purchase date of the home. Single family homes qualify for the program and the home must be your primary residence.
• To be eligible for the full tax credit, the home buyer’s adjusted gross income can not be more than $75,000 filing single / $150,000 joint. A home buyer with income level of that and up to $95,000 filing single / $170,000 joint is eligible for a reduced tax credit.
• The amount of the credit is the lesser of 10% of the purchase price or $8,000.00.
• No portion of the $8,000.00 will need to be repaid upon the sale of the home if the is owned for more than 3 years.
• The tax credit can be claimed on one’s individual or joint tax return between January 1, 2009 and December 1, 2009. It can be claimed on an amended 2008 tax return, or a 2009 tax return. You should consult a professional tax advisor for exact tax calculations and advice.

I hope this sheds some light on this First Time Home Buyer Tax Credit. After reading this I think it’s safe to say that in today’s real estate market if you are a first time home buyer and have the means necessary to buy a home you will not find a better time than the present to do so.