Man, between the extra low home prices that are currently out there and now this 8K tax credit somebody better buy something. 
That’s a deal on top of a deal. Check out the details below from this CNN article:
There’s a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama’s signature on Tuesday. First-time buyers can claim a credit worth $8,000 – or 10% of the home’s value, whichever is less – on their 2008 or 2009 taxes. A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill – the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns – was less than that amount.
If his total tax liability came to $6,000, but he had $7,000 withheld from his payroll, he would normally receive a $1,000 refund. With this credit, his refund would total $8,000.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy – or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
The article went on to say that the Senate was actually trying to pass a 15K tax credit. I might have had to get a new house in the babies name if they pulled that one. lol. Just kidding.
BMWK what do you think? Is this good or not enough? Would this make you buy a house if you were a first time buyer that was sitting on the fence about whether to buy or not?
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If you have been wanting a house and think you might be in it 5-7 years make the jump. This place will be yours and its only money (but 8k “insurance” sure is nice).
We bought our house last May and at first I was irritated that we had to pay our homebuyer credit back while others this year did not. We did pay more for our house then we would have at this point after all. We did our best to stimulate the housing market. But after thinking of what a great year we’ve had in our home I let it go.
For fairness sake why not give every homeowner a once is a lifetime 8k tax refund on their first home purchase or on the next sale of their home? Write this off as lowering capital gains on home purchases. It would be expensive but certainly stimulative.
This makes us wish we were eligible but we’re not so… to those that are I hope you’re able to take advantage of the opportunity.
We owned a house in Pennsylvania and recently bought a house in Georgia after a job transfer so we don’t qualify for the credit because we’re not “first time homebuyers”….With mandatory downpayments being 3.5% instead of 3% and families having difficulties coming up with that $$, it’s hard hard hard to buy a house nowadays and I think that’s probably what the government is banking on – tighter credit guidelines and less money, who’s going to be eligible to purchase a house???
I’ll be closing on my first home at the end of March and was waiting for this new tax credit to come through. I read somewhere that the new tax credit was trying to be made available for ALL homebuyers and not just first timers (like the 2008 tax credit). I’m unsure about this, because they are wanting to bring new buyers into the market. I can’t find the site that had referenced that at the moment.
I also read there may be a revision to the ’08 tax credit eliminating the repayment requirement. Of course, we can’t be certain until everything is passed.
Here’s a couple other reference links:
Great read. I will share my home buying shame story tomorrow.
i bought a home oct 31 2008 1st time ,do i get a credit or do i have to pay back
The example in the quoted article is incorrect. The article has been updated and now includes 3 correct examples.
“If his total tax liability came to $6,000, but he had $7,000 withheld from his payroll, he would normally receive a $1,000 refund. With this credit, his refund would total $8,000.”
with an $8,000 credit, shouldnt his refund be $9,000?
Is this only available to American citizens or every one. I am on visa and do not have a green card yet,, will I qualify for this.
Perhaps some others are in similar situation…where one spouse owns the home that a married couple lives in. The one currently owning the home does not qualify as first time home buyer, but the spouse not on the title, deed or mortgage does qualify.
If the owner sells the current residence, and the other ‘qualifying’ spouse buys the new primary residence, do they qualify for the tax credit and how much?
IRS has updated the 5405 form to reflect the $8000 First Time homebuyer tax credit today.
http://www.irs.gov/app/picklist/list/formsInstructions.html?value=5405&criteria=formNumber
James-
That is what I though too but as I understand it your tax refund is capped at 8,000. So if you overpaid your taxes and normally you would’ve gotten a refund of let’s say $2000 your only eligible for $6000 more from the tax credit. Lesson: To get full advantage, decrease the amount an employer is taking out of your paycheck. Personally I rather owe some money than not take advantage of free money.
Jessica,
I heard that your tax is not capped at $8,000 if you are a first time home buyer in 2009. Go to the CNN article below. They use the same example and the person gets $9,000 back and not $8,000. I want to make sure as well that it is not capped because I am closing on a house in mid June of 2009. Can anyone else post some advise here? I usually get a tax refund of $1,500 every year. So I am expecting a refund of $9,500 for my 2009 tax return.
http://money.cnn.com/2009/02/13/real_estate/homebuyer_tax_credit_finalized/index.htm?postversion=2009021617
I just closed on my home in November so I will have to repay the money back. That really stinks. I hope they revisit the 2008 House Credit. I wonder if there is anything we can do to try to convince them to do so.
Jasmine -
Thanks for the clarification. So I guess there are 2 distinctions. First-time home buyers can get the whole credit of $8000 + their normal refund. For previous homeowners (3yrs or less) the refund would be capped. Do I have it straight?
I was wondering if there are any White and Married with Kids websites……and “you people” think you aren’t racists? Substitute every black organization name with White. What would “you people” do. You would be crying racism when the fact is “you people” are more racist than any White people I know…….the sad thing is either you just don’t get it or you are flat out evil!
I welcome any of you to respond intellectually without using an ad hominem attack.
@John- no offense but this debate is old hat in these parts. I could almost take you serious and debate you on your points if you weren’t trying so hard with the “you people” line. The sad part is that you don’t get it and you never will so I choose not to waste my time. I encourage you to create a White and Married With Kids.com site if you choose, I’ve seen thousands of them on the web, just with different names so make it good because you’ll have a lot of competition.
I bet it’s Michelle using a different name lol..
@Jonesi – exactly right!
Thanks for posting the information in this article. I will link to it from one I recently wrote. It is unfortunate that the existing home buyer deduction was not made a refundable credit.
Andys last blog post..$100 (2 x $50) Economic Stimulus Give Away – Enter and Win Now!
I will be closing on a home at the end of March 2009, so I should be in the clear. I’m a first time home buyer and I’m putting 20% down (to avoid PMI). I’m in the middle of the process, so I’m hoping the loan process stuff goes through smoothly.
Can I claim this credit on my 2008 taxes? Oh wait, it looks like I can. Thanks Rayeshon! Will be doing this!
Can you claim this tax credit if you buy a house on land contract?
A co-worker mentioned that I may not qualify for the 8k credit, if I close with downpayment assistance, I have researched and have not found that, anyone know the truth of that??
I suggest all readers go to irs.gov and clk the forms & instructions and view FORM 5405—–there appears to be a lot of assumptions that the magic no. is $8000—–it may or may not be. You can only get up to $8000 or 10% of the purchase price !!!!!! whichever is SMALLER.
Then you start to consider overpym’t or underpaym’t. People STOP listening to anyone— view what is written on the sheets of paper by the IRS and do the calculations from the instructions on the screen.
The credit score requirements are getting tighter – fast. So anyone who is hoping to take advantage of this will need to find out NOW if they need to work to get their scores higher! Great info!
Eleanor Thornes last blog post..First Time Homebuyer Tips!
This isn’t a black vs white credit. I’m a white male living in Wisconsin, and i’m going to take full advantage of this credit when I close on my first house later this month. This has nothing to do with black or white, just for first time home buying americans affording upgrades to their first homes. The credit can’t be used as down payment, you can only get it after closing.
This is a great economic stimulus idea for all types of people. I’m using my 8,000 to buy a washer and dryer, as well as fix up the house with needed repairs.
Good luck to all.
This is a pretty good deal but I wish they would have extended to everyone not just first time home buyers. Call me crazy but I would think you would see a whole lot more activity in housing if this wasnt limited to the FTHB. my website
@Frank- tell me about it. If this was wide open everyone would be buying and selling. There was also talks that the senate initially wanted it to be 15K. If that doesn’t get you off of the fence I don’t know what will.
Thanks for the discussion – everyone is voicing my concerns. And while I’m not black, I am brown, and I completely love and support the concept of this website!! This is no different than any other site that serves a specific demographic.
my coworker, who bought her house in 2006 claimed the tax credit on her 2008 taxes and claims she is getting a 12600 tax refund. how can this be? i seen her printout from the tax company. im trying to figure out how can she qualify if she bought her home in 2006? that means all of you on here that missed the deadline by weeks or months can try your luck and see if they give it to you. they didnt ask for loan paperwork, closing papers, or nothing to substantiate the claim for the credit. she used her purchase date of summer 2006 and the amount she paid. how??
As a Realtor this $8,000.00 tax credit is jump-starting our ever so challenging current real estate market. As a Realtor that specializes in new construction sales and working with first time homebuyers our phones are finally starting to ring again.
We currently have the Parade of Homes Tour going on in the Twin Cities. Our builders are reporting a lot of interested buyers as well as generating sales during the last 2 weeks since the Parade of Homes began. I personally have seen an average of 30-40 people going through the models while I am there. As a Realtor I have been advising my client’s to save, save, save and they should have a minimum of 3.5% down to buy their home. Yes, with a 680 credit score you were once called a “rock star” at least in my book. Now with the finance guidelines tightening up you should have a 720 in a lot of cases. We are seeing multiple offers on short sales and foreclosed homes, which is also a great sign. I personally put down 10% when I bought my house 7 years ago.
Happy Buying!
Constance Koopman, Realtor, CSP
Relocation Team Worldwide
2009 Board of Directors-Builders Association of the Twin Cities
Ready. Set. Let’s Go to the Parade of Homes.
My husband and I closed on our home January 26, 2009 and originnally got the 7500.00 tax credit that had to be repaid, however after the bill was pass the credit would be 8000.00 we filed a 1040x amendment to get the remaining 500.00. I encourage anyone in the market to start actively searching and make sure you work on your credit beforehand. There are some great buys out there.
My name came off the last home I co-owned on April 19,2006. Can I
receive the $8,000 stimulus package if I close on a new home on March 31, 2009? Is that close enough to 3 years or does it have to be on
or after the exact date?
Thank you
beaglelovr if I was you I would not close on you new home until after the 19th of April just to be safe leave no loopholes. Also a comment on cathy statement about her coworker possible recieving that refund even though she purchase her home in 2006. IRS might not pick it but if they do she might have to give it back and to make it worst with a penalty/interest. Please use a professional and get the correct info. because anyone can put anything on you taxes but when the IRS write you, only you will be left hold the bag and have to get yourself out of this mess with penalties and money you don’t have because you were so happy you went out and spend that money and can’t return it. Use Caution… I had to pay a penalty was not happy when I got that letter from the IRS couldn’t dispute it but was happy spending my REFUND…LOL
how long it take to get the refun back
WILL U GET A 8000 DOLLAR CHECK OR WILL IT BE GIVEN OVER A NUMBER OF YEARS?
if i only get a 500 dallad refund back can i get a tax credit check
There is a lot of confusion regarding the 8,000 tax credit for first time buyers. Will this $8,000 be refunded to you in a check form? I’m totally confused. Or will your income tax be lowered $8,000? Thank you
Doesn’t anyone feel uncomfortable about putting so many new homeowners in the game? New homeowners are not tested, vetted, or proven.
There’s a distinct probability that we are ‘PAYING’ people to buy homes, who are not yet ready to commit and DELIVER a monthly mortgage payment.
This is exactly what put us in this situation – bad mortgages made to high risk borrowers who defaulted on their loans.
I want to see people move ahead, honestly. For some that may never happen. Today, I manage 7 mortgages, 2 car loans, 2 credit cards, 12 tenants/renters, a small business and a full time job – it’s not impossible, but it’s not easy either.
Remember, “Fools rush in, where wise men never go.”
CAN YOU GET THE TAX CREDIT IF YOU OWN A TRAILER THAT HAS BEEN PAID OFF FOR MORE THAN 3 YEARS..
CAN I GET THE $8000 CREDIT FOR FIRST TIME HOME BUYERS?
SPOOK
Thank you so much for the $8000 tax credit. Do you think they are going to make it part of the buyers downpayment? A lot of peole are wondering.
Be careful with the Tax Credit, there are some things you need to know like…There are circumstances in which you may have to pay the money back…
6 Things You Should Know About the $8,000 Tax Credit
You can also now get that money towards renovations and repairs when you get a loan now, but it still can’t be used for the actual downpayment of a home…
This breaks my heart because I recently divorced this past March, we had sold our house that I was the co owner on in Sept. 2007. The loan I am qualified for is considering me a first time home buyer but I was told I would not qualify for the tax $8000 tax credit. I’ve already decided that I can’t afford any house payment along with the van I currently still owe a little over $5000 on. This tax credit would have been perfect to pay this off with so its VERY upsetting that I just barely missed being considered a first time home buyer because of financing that house we sold back in Set. 2007 plus its such a fairly small amount of money (the van) thats keeping me from going through with buying a house now. I’m qualified and everything but I just know I can’t make the van payment and a house payment untill the van is paid off. I work in manufacturing and its very slow right now. If I could just get some overtime I would feel comfortable enough to go ahead with it because it won’t be long at all before the van is paid off…just not soon enough. I’m so sad and crying as I right this because it just seems nothing ever goes right foe me…
My son is buying his first home shortly. His income is not taxable due to his disability. If he gets a VA loan with nothing down would he qualify for the 8,000.00 tax credit?
I am a co-owner of one 2 bed-room CO-OP Apt. We bought the shares of CO-OP company. I just closed my new home, Is any one know if I qualify the 8K tax credit? Thank you.
Jac,
To answer your VA question. If he can get approved then yes, he will qualify, not to mention with his disability he should be waved from the 3K processing fee. I know this becasue it is what I did 2 months ago. He could file his taxes and just claim no income.
If in the example with a tax liability of 6000 and a tax payment via payroll deductions of 7000.. the normal return would be 1000…. Shouldn’t the 8000 credit make this a total return of 9000
IE: 1000 normal + 8000 credit ? Am I missing something Thank you Reginal
@Reginal
When you file your taxes…If you were to file without the credit and your return was going to be $1,000 and then you claim the credit, yes you would then receive $9,000
Has anyone received their 8000.00 check for the first time home buyer?
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