I hope you had a great weekend and had some time to spend with your friends and family. As I'm sure you are aware, President Obama has signed the $787 billion economic stimulus bill into law and it's now official. I have been receiving a lot of questions specifically about the First-Time Homebuyer Tax Credit, which is part of this bill. In order to help with some of the confusion, I have provided a list of FAQs below.
Q: How much is the First-Time Homebuyer Tax Credit for?
A: $8,000 or 10% of the purchase price of the home, whichever is less.
Q: What types of property does the credit pertain to?
A: Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.
Q: Is there a limit based on your income?
A: Yes. The full credit is available for individuals with an adjusted gross income of $75,000 ($150,000 for joint filers). The credit phases out above those caps ($95,000 and $170,000 respectively).
Q: Does the credit only apply to first-time homebuyers?
A: Yes. The purchaser (and purchaser's spouse) may not have owned a principal residence in the three years prior to purchase.
Q: Do I have to repay the tax credit?
A: No. There is no repayment for purchases on or after January 1, 2009 and before December 1, 2009. However, if the home is sold within three years of purchase, the entire amount of the credit is recaptured on sale.