By RealtyTrac Staff | Published: 5/21/2009
A $789 billion economic stimulus bill signed into law by President Obama in February 2009 included a generous tax break for first-time homebuyers.
The law allows first-time homebuyers to get up to an $8,000 tax credit if they purchase a home between Jan. 1, 2009, and Dec. 1, 2009. Unlike a $7,500 homebuyer tax credit originally part of the Housing and Economic Recovery Act of 2008, the tax credit does not have to be repaid as long as the property is not resold within three years.
When do I need to purchase to qualify?If you buy a home between Jan. 1 and Dec. 1 this year and close escrow during these dates, you will qualify for an $8,000 tax credit as long as it is your primary residence and you meet the simple requirements.
How does the law define "first-time homebuyer"?The law defines "first-time homebuyer" as a buyer who has not owned a principal residence during the three-year period before the purchase.
What are other requirements to qualify?All U.S. citizens who file taxes are eligible to participate. An income limit of $75,000 a year for individuals and $150,000 a year for joint filers also applies.
How do I apply for the credit?Taxpayers should use IRS Tax Form 5450 to claim the first-time homebuyer tax credit.
Does the credit have to be repaid?No. Unlike a similar tax credit passed in 2008, this $8,000 tax credit does not have to be repaid to the IRS.
Interest rates have crept up, but refinancing may make sense for you.
Purchase price, interest rate, taxes and PMI determine your monthly payment.
Find out if owning a home will save you money.