Learn About the First Time Home Buyer Credit

There are a host of financial incentives the federal government is providing to encourage people to buy their own home. The largest and most critical of these is the one contained in the 2009 Employee, Home Ownership, and Business Assistance Act. In accordance with the provisions of this act, a total of USD 8000 is provided to eligible first time home buyers as a tax credit number. It is a major monetary benefit to home buyers for the first time since one does not have to repay this amount until and unless the property is sold or is not used as the beneficiary’s principal residence that received the tax credit. read the blog

What are the conditions necessary to be fulfilled to be eligible for this tax credit? According to the IRS definition, a first time home buyer is a person who has not purchased a residence during the three years immediately preceding his purchase. Income levels have been stipulated above which the tax credit is not available for single buyers and married couples. For properties purchased between January 1 , 2009 and November 05 2009, a single buyer’s maximum income level must be less than USD 75,000 and the income level can not exceed USD 150,000 in the case of couples who are joint owners. Similarly, for sale transactions conducted from November 06 2009 to April 30, 2010, the maximum income level for single buyers and couples could be USD 125,000 and USD 250,000 respectively. Only in case either partner has not purchased a home within the last three years will you apply for a joint credit. The couple also has the option of taking out a loan by buying the house as a single buyer on behalf of the partner who hasn’t bought a house in the last three years.

Some important points you need to note about the first time home buyer credit include the fact that the amount of tax credit available depends on the property price The tax credit available is equal to ten percent of the purchase price of the property, with 8000 USD being the maximum amount that can be claimed. The other key point to remember that not all purchased homes will qualify for this rebate. Only those houses with a maximum price of USD 800,000 would be considered when granting credit to home buyers. In order to be included in the list of beneficiaries, you must ensure that you purchase a home by 30 April 2010, sign the necessary contract papers and complete the sale by 30 June 2010 to qualify under this scheme.

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