First-Time Homebuyer's Tax Credit : Fredericktowne Realty News

First-Time Homebuyer's Tax Credit

Feb. 28, 2009

The Stimulus Package has been passed and signed into law, and the dust has finally settled enough for the facts to emerge. How does the tax credit affect first-time Frederick homebuyers?

2008 Version Revised Credit

Amount of Credit Lesser of 10% of cost of home or $7500 Maximum credit amount increased to $8000

Eligible Property Any single family residence, including condos, townhouses, co-ops that will be used as a primary residence. No change. All principal residences are eligible.

Refundable Yes. Reduces, or can eliminate income tax liability for the
year of purchase. Any unused amount of tax credit refunded to purchaser. No change. Purchasers will continue to receive refund for unused amount when tax return is filed

Income Limit Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on joint return). Phases out above those caps ($95,000
and $170,000) No change. Same income limits continue to apply.

First-time homebuyer
only Yes. Purchaser and spouse
may not have owned a
principal residence in 3 years previous to purchase. No change. Still available for first-time purchasers only. Three-year rule still applies.

Revenue Bond Financing No credit allowed if home financed with state/local bond funding. Purchasers who utilize revenue bond financing can use credit.

Repayment Yes. Portion (6.67% or $500)
to be repaid each year for 15 years, starting with 2010 tax filing. No repayment for purchases on or after January 1, 2009 and before December 1, 2009.

Recapture If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale. If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.

Effective Dates Purchased on or after April 9, 2008, before January 1, 2009
Purchased January 1, 2009 through December 1, 2009

                     The Highland Real Estate Group
       Chris & Karen Highland * Frederick County MD Real Estate Agents
                       Specializing in Frederick County Real Estate
                                            301-831-9947
                                      Real Estate Teams, LLC
                                         isell4u2@msn.com
                                      Pictures of Frederick

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	2008 Version	Revised Credit
Amount of Credit	Lesser of 10% of cost of home or $7500	Maximum credit amount increased to $8000
Eligible Property	Any single family residence, including condos, townhouses, co-ops that will be used as a primary residence.	No change. All principal residences are eligible.

Refundable	Yes. Reduces, or can eliminate income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.	No change. Purchasers will continue to receive refund for unused amount when tax return is filed
Income Limit	Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on joint return). Phases out above those caps ($95,000 and $170,000)	No change. Same income limits continue to apply.

First-time homebuyer only	Yes. Purchaser and spouse may not have owned a principal residence in 3 years previous to purchase.	No change. Still available for first-time purchasers only. Three-year rule still applies.
Revenue Bond Financing	No credit allowed if home financed with state/local bond funding.	Purchasers who utilize revenue bond financing can use credit.
Repayment	Yes. Portion (6.67% or $500) to be repaid each year for 15 years, starting with 2010 tax filing.	No repayment for purchases on or after January 1, 2009 and before December 1, 2009.
Recapture	If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.	If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
Effective Dates	Purchased on or after April 9, 2008, before January 1, 2009	Purchased January 1, 2009 through December 1, 2009