FIRST-TIME HOMEBUYER TAX CREDIT
The $8,000 tax credit for first-time buyers is stimulating the housing market in the Twin Cities. It's a great time to consider buying or selling as more and more buyers are taking advantage of this incentive.
According to the stimulus plan, first-time buyers who purchase homes before the end of November, 2009 may be eligible for an $8,000 tax credit. Here is the link to the IRS website with access to the tax credit forms and details of the plan.
It is important to remember that the $8,000 tax credit is just that---a tax credit. The benefit of a tax credit is that it is a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save a buyer $1,000 to $1,500 when all is said and done.
Better still, the tax credit is refundable and buyers may amend their 2008 tax returns to claim the tax credit this year! The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
The tax credit is applicable to any home used as a principle residence: single family homes as well as townhouses, condos, manufactured homes, and even houseboats!
Buyers will have to repay the credit IF they sell their homes within three years.