The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes for qualified first-time home buyers purchasing a primary residence on or after January 1, 2009 and before December 1, 2009. This is too good to miss - it's a $8,000 tax CREDIT (not deduction but a credit).
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as a "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. Higher-income buyers may receive a partial credit.
Applying for the credit is easy - just claim it on your return on the First-time homebuyer form*. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
For more information about this new tax credit click here. If you're planning to purchase or sell a home or have any questions about current market conditions, please fell free to contact me by email denise@denisemreed.com or by phone 207-356-3906.
*Please seek advice from your tax professional to make certain you qualify for this tax credit.