First-Time Home Buyer Tax Credit

If you are thinking about buying a house in order to claim the first time home buyer credit, it’s time to act. First-time home buyers can get a credit of up to $8,000, but you must sign a purchase and sale agreement by April 30, and close on or before June 30. If you have not owned a home in the last three years, you are eligible to receive a tax credit of ten percent of the purchase price, up to a maximum of $8,000. Even if you have owned a home before, if you buy a new home having owned and lived in your current home for at least five consecutive years out of the last eight years, you will be eligible for a tax credit of up to $6,500. The credit is claimed by filing an additional IRS form with your federal tax return for the year of purchase. If you bought a new home in 2008 or 2009 and have already filed your return without claiming the credit, you may amend your return for that purpose. Now the catch: there are income limits to the availability of the full credit. For purchases after November 6, 2009, your adjusted gross income cannot exceed $125,000 for singles and $225,000 for marrieds filing jointly. For purchases before November 7, 2009, the limit is $75,000 for singles and $150,000 for marrieds filing jointly. So come on, first time buyers—get out there and help stimulate the real estate market AND get a tax credit at the same time.