Tax Credit Questions and Answers

The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8000 for qualified first-time home buyers Purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

Questions and Answers:

1. Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home-new or resale- are eligible for the tax credit. The home purchase must occur on or after January 1, 2008 and before December 1, 2009. The purchase date is when the closing occurs and the title is transferred.

2. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. So if you have owned a home but not within the last three years you are still considered a first time home buyer.

3. How is the amount of the tax credit calculated?
The tax credit is equal to 10% of the home's purchase price up to a maximum of $8,000.00.
Ex. a $50,000 purchase will qualify you for a $5000.00 credit. Any home $80,000 or above qualifies you for the first $8,000.00.

This information was gathered from www.federalhousingtaxcredit.com.

My next post will feature questions and answers on income and income limits. Please contact me anytime for immediate answers.

Now is a great time to buy, don't miss out on great interests rates and this historic tax credit.