First Time Home Buyer Tax Credit Explained

The Mountain Life Team Blogger March 4, 2009

In recent efforts by our Congress to stimulate the economy and try to revive the housing market, a new legislation has been enacted providing a tax credit of up to $8,000 for FIRST TIME home buyers. The American Recovery and Reinvestment Act of 2009 authorizes a Tax Credit of up to $8,000 for qualified First Time home Buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

Here are the qualifications the Home Buyer must meet for the Tax Credit:

  • Money PileThe Tax Credit if for First Time Home Buyers ONLY.
  • The Tax Credit does NOT have to be repaid.
  • The Tax Credit is equal to 10% of the home’s purchase price up to a maximum of $8,000.
  • The Credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
  • Single Tax Payers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the FULL Tax Credit.

In addition to the Tax Credit, the American Recovery and Reinvestment Act of 2009 has several other provisions that will benefit home buyers and the housing market.

  • Will help home buyer in high-cost markets by extending the FHA, Fannie Mae and Freddie Mac loan limit of $729, 750 through the end of 2009
  • Allows state housing finance agencies to help buyers at closing by advancing the credit as a loan using proceeds from tax-exempt bonds.
  • Extends the tax code section 25C credit for energy-efficient home improvements through the end of 2010; increase the credit rate from 10% to 30%; raises the lifetime cap from $5,00 to $1,500; expands the list of eligible improvements.
  • For 2008 operations, expands the net operating loss carryback period from two years to five years for small businesses.
  • Temporarily allows exchange of Low-Income Housing Tax Credit allocating authority for tax-exempt grants and appropriate $2 Billion in HOME funding for affordable housing projects.
  • Provides a “patch” for the Alternative Minimum Tax for tax year 2009.
  • Increases bonus depreciation and section 179 small business expensing for business investment in 2009.
  • Increases New markets Tax Credit allocating authority for 2008 and 2009.
  • Delays for one year – from 2011 to 2012 – the start of 3% government contractor withholding requirement.

I hope that you find this information to be helpful, especially those looking to buy their First Home. If you have any specific questions or concerns in purchasing a North Georgia Mountain Home For Sale, please call me at 706.633.8186. I would really appreciate the opportunity to talk with you and offer any advice that you might be seeking. As always, I Thank you for coming up on The Porch and visiting. Please come back and visit again real soon.

Make it a GREAT day!