Time is running out on $8,000 tax credit

I recently attended a seminar, and one of the discussions centered upon the First Time Homebuyer’s Tax Credit. Uncle Sam will give you $8,000 to buy a home if you meet the following qualifications:

1. The First Time Homebuyer’s Tax Credit is for a maximum of $8,000.

2. You must be a first-time homebuyer. The definition of a first-time homebuyer is anyone who has not owned a principal residence for the last three years. So a first-time homebuyer does not necessarily have to be a first-time homebuyer.

3. In order to qualify for the full $8,000 tax credit, the home being purchased must be at least $80,000 and purchased no later than December 1, 2009. Time is running out.

4. The most significant difference between this tax credit and the one U.S. Congress passed in 2008 is that it does not have to be repaid as long as the owner lives in the home a minimum of three years.

Some additional rules:

If the home is sold prior to three years of occupancy, the tax credit is repaid to the government.

To obtain the maximum tax credit, a single homebuyer may have an adjusted gross income no greater than $75,000, and a couple no greater than $150,000. Adjusted gross income may be more, but the tax credit benefit will be decreased.

Single-family homes, mobile homes, townhouses, condominiums, manufactured homes and even houseboats qualify for the credit if they are purchased and lived on as a primary residence.

The credit may be claimed against your 2008 IRS tax return. This allows a qualifying homebuyer to get their $8,000 within approximately 60 days of closing on the home.

You should know that to realistically close on a home before that date, a person should be under contract no later than October 1, 2009 in order to meet a closing date of December 1. You should also expect that unless it is extended there will be a surge of buyers (competition for the best homes) as the year unfolds, all trying to meet that deadline so get started NOW!