Let’s Eat Some Stimulus Pie

Image Courtesy of Flickr

How much is this first-time homebuyer tax credit that President Obama approved just recently?
The amount is $8,000 or 10% of the sales price whichever is less.

What type of home qualifies?
Virtually any home that will be used as your primary residence.  This means single-family homes, condominiums or townhouses.  Sorry – you’re vacation home at the beach won’t qualify.

Is this a true tax credit or is it a tax deduction?
Tax credit!  First time home buyers claim the credit on their federal tax return.  The credit amount reduces any taxes owed or increases the refund to the homeowner.  Pretty neat – huh?

Does every first-time homebuyer qualify regardless of income?
No.  A single individual must have adjusted gross income of less than $75,000.  If you’re filing a joint return, just double this limit.

Is there a repayment requirement?
Nooooo!  Unlike previous incentives offered by the government, you don’t have to repay the cash.  However; if you decide to sell the house within three years after purchasing it, the government will follow you to the ends of the earth and ask to be repaid.

When do you have to buy a home?
The home must be purchased between January 1, 2009 and December 1, 2009.  Notice I said ‘purchased’ – not ‘under agreement.’  So if you are planning on taking advantage of this windfall, you will need to actually start the homebuying process weeks before the deadline to ensure that you meet the parameters.

If you have other questions regarding this program, drop me a line.  In the mean time; put on that bib, grab a fork, lick those lips and start eating some stimulus pie.  Bon appétit!