FAQ About the Homebuyer Tax Credit
December 16th, 2009 categories: Albemarle County, Charlottesville, Communities, FAQ, Financing, First Time Buyers, Fluvanna County, For Buyers, For Sellers, Info, Lake Monticello, Louisa County, STR Market Info Blitz
This post is part of the Strong Team REALTORS Market Info Blitz. We’re heating up the Winter market by giving you three-months worth of the information you need, November through January. Check out the latest posts in the blitz, here.
Take advantage of the homebuyer tax credit!
We told you about the extension of the homebuyer tax credit as soon as it was extended and expanded back in November. Since then we’ve received a lot of questions from folks looking to buy a home in the Charlottesville area about the homebuyer tax credit and how they might be able to take advantage of it.
We thought it might be a good idea to answer some of the most common questions about the homebuyer tax credit right here, so that anyone interested in it will have a better understanding of how it works. As always, if you have additional questions about the tax credit that might not have been answered in this post, please feel free to contact us, and we’ll be happy to help you.
How much is the first-time homebuyer tax credit worth?
The first-time homebuyer tax credit is $8000. If you are a married couple who files your taxes separately, the tax credit is $4000 each.
Who is considered a “first-time homebuyer?”
In order to be eligible to receive the first-time homebuyer tax credit, you must not have had an interest in a principle residence for 3 years prior to your current purchase.
How much is the tax credit worth for current homeowners?
Current homeowners may receive a $6500 tax credit. If you are a married couple who files your taxes separately, the tax credit is $3250 each.
<Who is considered a “current homeowner?”
In order to qualify as a current homeowner, you must have used the home being sold as a principle residence consecutively for 5 of the previous 8 years.
When does the credit expire?
The credit expires for both first-time homebuyers and current homeowners on April 30th, 2010. In order to take advantage of the credit, you must have a binding contract by midnight on April 30th, and the home must close by July 1, 2010.
Are their limits to eligibility?
Yes. The income limits for eligibility are $125,000 annual income for single persons, and $225,000 annual income for married couples. There is also a limit of $800,000 for the home being purchased.
Is there paperwork
As with any government program, there is some paperwork to be done in order to receive the credit. The IRS has special forms for your purchase, which you can get from your closing attorney or accountant. You will also need to attach to your tax return documentation of the purchase, which will at least include the signed HUD-1 statement from your closing.
Will the government send me a check?
Maybe. When you apply for the credit, it will be applied to your tax bill. That means that if you owe less taxes then the amount of your credit, you will receive a check from the IRS. If the amount of the taxes you owe is more than the credit, it will simply reduce your total tax burden. Some people who took advantage of the tax credit early filed amended 2008 returns, and were able to receive a check, since they had already paid their 2008 taxes.
Are their homes available that will work for me?
Of course! We’ve worked with a number of buyers this year who have taken advantage of the tax credit. There are plenty of homes for sale in Lake Monticello, Charlottesville, and Albemarle that are perfect for people who want to take advantage of the tax credit. We can help guide you through the process every step of the way. If you are interested in taking advantage of the tax credit, just let us know, and we’ll be happy to help you!
Photo credit: http://www.flickr.com/photos/wwworks/ / CC BY 2.0
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