What are homebuyer tax credits?

Homebuyer tax credits are available to Americans who purchase a home. This originally applied to home purchases made by homebuyers between April 9, 2008 and July 1, 2009. However, President Obama extended the original deadline to May 1, 2010 and gave them until end of June 2010 to close your transactions. In addition, the Chamber voted to extend it until September 30 of this year.

Home buyers defined by law as persons who have not owned a habitual residence during the three years prior to the acquisition of the home may avail themselves of these credits. They could be eligible for ten percent of the purchase price of the property, with a maximum of $8,000. Current homeowners who have been living in their primary residence for five consecutive years out of eight and are purchasing a home to be their primary residence may qualify for this type of credit up to ten percent, up to a maximum of $6,500.

Homes that qualify for these tax credits are those with a purchase price of no more than $800,000, which includes new construction or resale homes, townhouses, single-family detached homes, or condominiums as long as it is used as a primary residence. Rental properties and vacation homes do not qualify. He further explained, this is refundable, which means that if the amount of income taxes you owe is less than the amount of credit you qualify for, the US government will send you a check in the amount of the credit. difference. For example, a first-time homebuyer who qualifies for the full $8,000 credit and owes $5,000 in income taxes will pay nothing to the IRS and will receive a $3,000 payment from the government. If he is to receive a refund of $1,000, he will receive $9,000 in total.

In fact, this is a true credit, since it does not have to be repaid unless the owner stops using the house as their primary residence or sells it within three years of purchase. Many people signed contracts to buy a home before September 30 before the tax credit expired. For a first-time or current homebuyer loan, if your purchase date is May or June 2010, you will need to show that you entered into a contract to purchase the home before May. It is important to present the necessary documentation for this. Those who are members of the military and the intelligence community have an additional year to purchase a home and qualify for the tax credit.

Filing and claiming this tax credit requires several documents and must be mailed and filed. However, many have used Turbo Tax, TaxAct to calculate taxes and complete their returns and print the documentation and submit it. When homebuyers began claiming their first-time homebuyer tax credits last year along with an amended 2008 tax return, they began receiving the credit after six weeks. As more and more people apply, receiving the tax credit took longer, especially if the paperwork is not complete.