The new $787 Billion Economic Recovery Package signed into law scaled back the 1st Time Home Buyer Tax Credit to $8,000.00 (from the proposed $15,000.00). This represents not only an increase of $500.00 over the previous $7,500.00… but for all 1st Time Home Buyers who purchase between January 1, 2009 and December 31, 2009, the repayment requirement was eliminated (not so for those who purchased in 2008… wonder why?).
Its important to note that this tax credit is for 10% of the purchase price up to $8,000.00. Keep that in mind.
This makes this a true tax credit which can be used to offset tax liabilities… or in the event their is no tax liability, the home owner will receive a check back from the IRS!
If the home is resold within 3 years, the home owner forfeits the tax credit or has to repay it, if taken.
This tax credit will phase out for single taxpayers with an adjusted gross income of $75,000 ($150,00 for married couples filing jointly).
You can claim this tax credit on your 2008 return using Form 5405. If you have already filed for 2008, you can file an amendment or adjust your paycheck withholding for the credit amount thus increasing your take home pay for the balance of 2009. Of course, you could also choose to take this credit on your 2009 taxes if you choose.
Bottom Line: This should stimulate activity in the 1st Time Home Buyer price range. Savvy Investors who sell into this market will find numerous creative ways in which to capture all or part of this “found money” in helping buyers in this class become home owners. To my knowledge, there is no stipulation in this bill that requires institutional financing on these purchases for qualification… and should stimulate various owner financing options.
Stay tuned for more details and creative opportunites as they arise!
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Your page said “might as well subscribe to my RSS feed” and then asked for a password?? How do I get one? My normal password with your realestatesolutions.com does not work.
Also, is there a way I can keep up with any news you have on the continuingly changing info concerning first time home owner $8000 tax credit. Last person I talked with said she thinks it will be extended, but probably word will not be given until Nov 16th , final day?? Do you have other info. Please reply Scott. Imp. 2 me.
Roy