Update: First-Time Home Buyer Tax Credit

While the proposed $15,000 home buyer tax credit died in negotiations between the House and the Senate, the $787 billion stimulus bill that President Obama signed into law Tuesday includes a similar, yet smaller amount, designed to help revive the real estate market. Here are some key things you need to know about the recently enacted $8,000 first-time home buyer tax credit:

- This credit is equivalent to 10 percent of the purchase price of the home, but it’s capped at $8,000. It applies only to first-time home buyers and principal residences. The best part about this credit is that unlike the previous $7,500 home buyer tax credit, this one does not have to be repaid.

- For the purpose of this legislation, a “first-time home buyer” is defined as someone who hasn’t owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.)

- The credit is only available to those who purchased or built a home on or after January 1 and before December 1, 2009.

The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that’s $150,000 for married couples. If you earn more you may still be eligible for a reduced credit.

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Christine Cooney

Editor at The House Designers

Christine has over a decade of experience as a house plan and floor plan expert. Outside of providing her expertise to customers to help them find and build their dream homes, her passion and knowledge of the home building industry allows Christine to guide families and builders through all of the important steps from finding plans to building custom homes that meet the expectations of today’s new home owner. Christine’s years of knowledge of the diverse trends and needs of the modern homeowner has made her into an authoritative and trusted voice in the online house plan community.

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