The $8k Homebuyer Tax Credit

Recently Congress has enacted legislation in an effort to help encourage homebuyers and get the economy going once again by providing a tax credit to buyers. Although it's being restricted to those purchasing a home for the first time and only being valid on purchases made between 1/1/09 and 12/31/09, the $8,000 reward is quite the incentive. The new credit, unlike previous tax credits that have been offered, does not need to be repaid over time.

In order to qualify for the new tax credit, homebuyers must meet certain criteria. First, the person purchasing the home must be a first-time homebuyer. According to the legislation, a first-time homebuyer is defined as someone who has not been the owner of a principal residence for a period of three years prior to making the purchase. There are also income restrictions placed on who can receive the credit, with the credit being only available to single taxpayers who have an income of up to $75,000 and married taxpayers with an income of up to $150,000.

The actual amount of the credit the homebuyer receives is based upon the purchase price of the home, with the amount of the credit being equivalent to 10% of the price. There is, however, an $8,000 limit on the amount that can be credited to the homebuyer. Therefore, if the purchase price of the home is more than $80,000, the homebuyer cannot receive more than $8,000 in tax credits.

Under the new tax law, any property that can be used as a primary residence is eligible for the tax credit. This includes, but is not limited to: -Single-Family Detached Homes -Townhouses -Condominiums -Manufactured Homes -Houseboats

Newly constructed homes also meet the criteria required. If purchased from a builder, the settlement date must occur within the 2009 calendar year. Buyers who are constructing a home on property they already own are still eligible for the credit as well, so long as they first occupied the home on or after January 1, 2009, and before December 1, 2009.

Although the new legislation is different from previous legislation because the credit does not need to be repaid, it is important to note that the homebuyer must utilize the property as his or her primary residence for at least three years after making the purchase. Otherwise, it is possible that the credit will need to be repaid.

Learn more about the tax credit and search active listings on Lake Austin Green Shores houses.