Some of the regulations and filing requirements haven’t been released, but the latest stimulus bill has eliminated the $7,500 tax credit and turned it into an $8,000 credit. Unlike the 7500 credit, the $8000 credit doesn’t need to be repaid. To qualify for the $8,000 credit, you must earn less than $150,000 in adjusted gross income for couples filing jointly. Also, you must stay in the house for three years or there may be some payback penalties involved.
The $8,000 credit is good for homes purchased by first-time buyers, defined as anyone who hasn’t owned a home in the last three years and purchased between January 1st and November 30, 2009. You can even take the credit on your 2008 taxes if you have not already filed.
This Week’s Real Estate Insight
A tax credit is a dollar-for-dollar reduction in your actual taxes due. An $8000 tax credit reduces your $9000 tax bill to $1000. The National Association of Realtors estimates the tax credit will result in over 250,000 houses sold.
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