First-Time Homebuyer Tax Credit Explained
Do I have to pay it back?
Can I get the money in 2008?
Can I get a Bond Loan and the Tax Credit?
Those questions and more answered!
Max Amount of Credit $8,000
· Max credit given if home price exceeds $80,000
· If Less than $80,000, 10% is Max Credit ($65,000=$6,500)
Eligible Property
· Single Family Residences Only
· Must be Principal/Primary Residences Only (no investment or second homes)
Income Limit
· $75,000 Individual Incomes
· $150,000 for Joint/Married Incomes
First Time Homebuyer Eligible
· Anyone who has not owned a primary residence in the last 3 years is considered a first time homebuyer.
Tax Credit with MHDC Bond Loans
· Yes, borrowers can still get the Tax Credit even if they bought the home with a Bond Loan
Repayment
· Absolutely NONE (See Recapture Tax)
Recapture Tax
· Yes. If buyers sell the home within three (3) years, 100% of the tax credit must be paid back.
Tax Credit on 2008 Tax Returns
· Yes, if a borrower has not filed their 2008 tax returns but have bought a home in 2009, they can claim the tax credit.
· Also, if a buyer has already filed their taxes for 2008 and then purchase a home, there MAY be a way to amend your return and claim the tax return this year instead of waiting until 2010. Borrowers will need to see a tax professional to arrange this and more details.
Getting Money Sooner than 2010
· Borrowers, who are certain they will be eligible to receive the tax credit in 2010, may reduce their monthly federal withholdings (W4). Borrowers will need to seek advice from a tax professional prior to making any adjustments to monthly withholdings from their income.
Program Terms
· Home purchased between January 1, 2009-December 1, 2009