How Orange County Home Buyers Can Take Advantage of the First-Time Home Buyer Tax Credit
One of the most exciting provisions of the American Recovery and Reinvestment Act of 2009 for Orange County Home Buyers is the $8,000 tax credit available for first-time home buyers. Add this tax credit to the historical low home prices and interest rates – and – VOILA – a perfect time for first-time home buyers to jump in and buy a home – especially here in Orange County!
These are the key points for Orange County Home Buyers to keep in mind:
- To meet the definition of a first-time home buyer – you cannot have owned a home in the last three years. Simple – right?
- The maximum credit is up to 10% of the purchase price of the home. HUGE! But the kicker is the total credit cannot go over $8,000. So as long you’re paying at least $80,000.00 for the home – you get the maximum credit allowable. Simple to do here in Orange County.
- You never have to pay the credit back – as long as you live in the home for at least 3 years in a row.
- You must buy the home before December 1, 2009 in order to get the credit. HELLO – what are you waiting for – with all the Short Sales in the market – it may take you that long to close a deal!
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. The credit is phased out above these income levels.
- You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendent (child or grandchild); however, you can still qualify for the credit if you purchase a property from siblings, nephews, nieces or others.
- If you are married, both spouses must be first-time home buyers.
- If more than one unmarried individual is buying the property, the credit can be split up among all the individuals who qualify. However, the total credit taken cannot exceed $8,000.
One of the greatest benefits of the $8,000 credit is that you can claim it on your 2008 tax returns, even if you buy a home in 2009. All you need to do is file an amended tax return with the IRS after you buy your new home and they will send you a refund check for $8,000. Remember though, you’ll receive the $8,000 from the IRS AFTER you purchase the home, so you cannot use the funds to help with your down payment unless you purchase using an FHA loan. On May 29, 2009 the Federal Housing Administration (FHA) announced that they will soon allow lenders to offer borrowers short-term bridge financing in amounts equal to the tax credit. FHA will be publishing the details shortly. So stay tuned here for the latest on tips for Orange County home buyers.
Tell Others What You're Reading!
Connect with me!
