Hello all: There seems to be a fair amount of confusion about how the new $8000 tax credit passed by Congress recently will work. So here it is in a nutshell.
The $8000 tax credit is available to all first-time homebuyers or buyers who haven't owned a home in the last 3 years. It is a credit on your return and the maximum is $8000 or 10% of the purchase price. For example, a home bought for $50,000 would get a $5000 tax credit. Anything over $80000 would get the full $8000. The maximum allowed is $8000.
If you plan on purchasing this year, realize that you'll still need to come up with the down payment (in all likelihood). You will get a tax refund but only after you have bought your place. If you owe money, deduct what you owe from your credit. This will give you the amount of your refund. If you have a refund coming, you can add $8000 to that number.
The $8000 tax refund replaces the $7500 tax refund in place earlier. The good news is the $8000 doesn't need to be paid back. The $7500 was an interest free loan that needed to be paid back over 15 years. The new $8000 tax credit is good from January 1, 2009 through December 1, 2009. This stimulus has sparked quite a bit of demand among first-time homebuyers. This is a good thing. All in all, I like this measure and expect it to help all of us as the real estate market continues to recover. Have a great day!
Paul McFadden
Thanks for helping spread the word on this Paul. I'm shocked that I've only found 1 customer so far that had heard about it! Talk it up as much as you can!
Gerry Suarez, Jr.
Your FHA Loan Pro!
Gerry: Thank you. I think we're all a little confused by this stuff. It's becoming clearer all the time though. Take care.
Hey Paul -- thanks for the post. It's also worth mentioning that those eligible for the 2009 credit can claim it on their 2008 taxes even though they bought the home in 2009. They can also file an amended return if they're already completed their tax return.
This way they don't have to wait until next year before they see the money! --James Wirth
James: You're welcome! Thanks for doing that for me! Take care.
Thanks, Paul. This is a great info. And actually this is so much 'CLEARER' than the one I got from other loan officer a couple weeks ago. I have a young couple that might take advantage of this info, so I will forward this to them.
Thanks, Yuno. I appreciate it. If your client needs help, let me know, I don't speak Japanese so would use you as the interpreter! Have a great day!