First Time Homebuyers Tax Credit for 2009
Posted by Paul Francis on Saturday, March 28th, 2009 at 4:19pm.First Time Homebuyers Tax Credit for 2009
We've been getting a lot of calls lately with questions pertaining to the new $8,000 first time homebuyers tax credit that was passed in the stimulus bill. It's easy to get confused with all of the information out there comparing it to the 2008 Tax Credit so I'll try to keep it as simple as possible. Let's forget the 2008 Tax credit bill which was really structured as a loan that had to be paid back. I think it's pretty safe to say it was not very successful despite all of the promotion from sales minded entities.
The 2009 first time homebuyers tax credit does not have to be paid back. But of course.... there are requirements.
Keep in mind that I am a Realtor® and not an Accountant or Tax Advisor. All the "What If" questions should be directed to whoever prepares your taxes. I'm simply covering the basics since it is a fantastic program to take advantage of for Las Vegas Real Estate and I'll provide a resource from the IRS to help confuse you.
The Basics behind the $8,000 Tax Credit
The Time Frame to Take Advantage of this Program is from January 1st 2009 to December 1st 2009and title must be transferred to your name by December 1st. In other words... it's not when you put in the offer to purchase a home. If you wait until November 20th to start looking for a Las Vegas Home, chances are it's not going to close in time unless you are paying cash and are not dealing with a bank such as a short sale or foreclosure transaction. If you want to pursue the really good Las Vegas Short Sale deals... you might want to start looking now since these can take quite some time as everybody waits around for the Lender to figure out what they want to do.
You don't really have to be a first time homebuyer. The requirement and tax credit is for taxpayers (including their spouse) who have not owned a home for the past three years. If you sold a home and you transferred title to the new owner on March 27th, 2006and you have had no ownership interest in real estate since then, you are now eligible to take advantage of this great incentive.
The Purchase must be a Primary Residence which means no investment homes or vacation homes. Sorry, you can't buy a Las Vegas vacation home under the requirement with the intentions of occupying it two years down the road when you retire and move to Las Vegas.
Condominiums, Townhomes, Mobile Homes and even some houseboats qualify.
The purchase CAN NOT be from a close family member such as your Parents, Grandparents, Brother, Sister, Children or Grandchildren.
Income requirements are Single Taxpayers making less then $75,000 or Married Couples making less then $150,000 a year. A partial tax credit is available for single taxpayers that make up to $95,000 and for married taxpayers making up to $170,000.
The 2009 Tax Credit is 10% of the purchase price of the home up to $8,000. If you purchase a $60,000 condo, then you can get a tax credit for $6,000.
The big change for the 2009 First time homebuyers tax credit in comparison to the 2008 bill is that it is a REFUNDABLE TAX CREDIT. For example, if you have a tax liability of $500 for 2009 and you purchase an $80,000 home during the time frame and meet all the requirements, you will get a $7,500 check from the IRS. A pretty sweet deal. You can also claim it on your 2008 tax return with an amendment or an extension of your 2008 tax return if you need some cash now.
Yes... you do have to buy and close on the home first before claiming the credit.
You Must Own and Occupy the Home for Three Years. Unlike using a VA loan, you cannot turn it into an investment property after a year. It must be your primary residence for three years and if you sell it before then, you will have to pay the IRS back.
Primary Residence is considered to be where you live 50% of the time.
Here is more information from the IRS including Form 5045 with a list of requirements.
Interested and Ready to Take Advantage of this Program for a Great Las Vegas Home?
Why not if you qualify for the program? The combination of low priced Las Vegas Homes and Low interest rates can certainly be cheaper then renting. A $100,000 Las Vegas home with 3.5% down and a 5% interest rate has an estimated Principal and Interest only payment of $518. I don't even need to get into the tax deductions to show that it's cheaper then renting a Las Vegas home. Buy now, take advantage of the $8,000 tax credit and turn it into a rental home in three years for positive cash flow and let a renter pay off the mortgage for a good long term investment that will build true security.
The first thing you need to do is Call me at 702.592.3058 and I'll refer you to some great Las Vegas lenders to work up some loan scenarios that you will be comfortable with. We'll then work with you and find you a great Las Vegas home that meets your needs, negotiate the best price and help make the purchase as simple as possible in a language that you understand.
My preferred lenders have been in the business for awhile and will explain everything to you without all of the confusion and complaints that you may have heard of from inexperienced loan officers more interested in just doing a loan.
If you've been sitting on the fence doing nothing because you don't know where to start... well sorry.. but you no longer have an excuse. :)
Paul Francis, CRS
Prudential Americana Group - Realtors®
Las Vegas Real Estate - Summerlin Homes
702.592.3058
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Share6 Responses to "First Time Homebuyers Tax Credit for 2009"
[...]just started showing signs of correcting are about to get hit with a big left blinding punch. The $8,000 first time home buyers tax credit is expiring on 12/01/2009 and interest rates will continue to go up. Real Estate is local but[...]
Posted on Saturday, June 6th, 2009 at 5:13 AM.
Would someone please find me a lender that is interested in helping me secure a home. I just talked to a guy that asked me to put $45,000 down on a home for $311,000. That is insane, I thought there were several programs to help first time buyers.
Posted on Saturday, August 15th, 2009 at 1:38 PM.
[...]frame of what happens after a Notice of Trustee’s sale is filed. Also keep in mind that the $8,000 tax credit for new homeowners is set to expire on December 1st. (Homes must close by November 30th for new homeowners to take[...]
Posted on Tuesday, September 1st, 2009 at 9:19 AM.
[...]credit expires as the new inventory hits the market for sale. If you don’t qualify for the $8,000 tax credit in the first place… should you wait and see what happens? Impatient buyers trying to beat the[...]
Posted on Friday, September 18th, 2009 at 10:34 AM.
[...]While the National Association of Realtors® is lobbying for an extension / expansion of the First Time Homebuyers Tax Credit as buyers and their real estate agents scramble to meet the deadline, the Federal Reserve sees[...]
Posted on Friday, September 25th, 2009 at 8:17 AM.
[...]Las Vegas real estate buyers are taking advantage of the low prices, low interest rates and the first time homebuyers $8,000 tax credit to move inventory. Las Vegas Foreclosure Search To view foreclosures currently available for[...]
Posted on Friday, April 3rd, 2009 at 11:47 PM.