On Ferbruary 17, 2009 the new economic stimulus legislation that was signed into law created an even bigger and better tax credit than already existed.  This credit combined with the current buyer’s market, creates an amazing opportunity for a first time home buyer to either buy a newly constructed home or take advantage of a re-sale and “instantly” have money to put towards repairs or remodeling.

The $8,000 credit applies to any first time buyer with a modified adjusted gross income less than $95,000 for single or head of household taxpayers or $170,000 for married couples filing jointly.  A first time buyer is described as a buyer who has not owned a principal residence during the three- year period prior to the purchase.  All homes apply, including newly constructed homes.

This is a true credit and there are not payback provisions as in the previous version, with the exception of if the owner sells the home within three years after the purchase.   The credit is also refundable, meaning if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.  Credits can be applied to 2008 or 2009 tax returns.

The $8,000 credit is applicable for single or head of household taxpayers whose modified adjusted gross income is less than $75,000 (or $150,000 for married couples filing jointly).  Incomes larger than that still qualify for a partial credit, so long as they are below the $95,000/$170,000 mentioned earlier.

Please visit www.federalhousingtaxcredit.com for more information.

~ Russell Ives