The $8000 First Time Homebuyer Credit

First time home buyers can claim a credit of up to $8,000 on their 2009 taxes for a primary residence purchased between January 1st, 2009 and December 1st , 2009.  This program replaces the old $7,500 tax credit and unlike the old credit, this is a true credit that does not have to be repaid as long as the buyer remains in the home for 3 years.

Here are the highlights:

•   Credit amount:  10% of the sales price of the home up to $8000.  Any home purchased for $80,000 or more qualifies for the full $8,000 credit.
•   Qualified homebuyers:  Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.
•   Eligible purchases:   Any primary residence purchased between 1/1/2009 and 12/1/2009.
•   When:  The credit will be available when you file your 2009 taxes (still some debate over whether it can be applied when you file your 2008 taxes).  This credit will first offset any taxes you have due, and any remaining credit will be issued to you as a tax refund.
•   Income limits:  Anyone under $75,000 AGI (individual) and $150,000 AGI (joint) gets the full credit.  The credit phases out between $75k and $95k individual and $150k and $175k joint.
•   Recapture: If home is sold within three years of purchase, entire amount of credit is recaptured on sale.