GMAC Real Estate - First-Time Homebuyers Tax Credit
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$8,000 First-Time Homebuyers Tax Credit

Overview

The Economic Stimulus Bill signed by President Obama in February offers first-time homebuyers a tax credit equal to 10% of the cost of their home up to $8,000. This tax credit is available to first-time homebuyers who purchase a home in the United States as their principal residence on or after January 1, 2009, and on or before April 30, 2010.

To quality as a first-time homebuyer, you cannot have owned an interest in a principal residence in the past three years from the date of the qualifying purchase.

To quality for the full amount of the tax credit, you must earn no more than $125,000 if filing as Single or Head of Household. If filing a joint return, the buyers may have a combined income of no more than $225,000.

The tax credit must be taken as a credit from your total tax liability for the 2009 or 2010 tax year. Also, the tax credit is "refundable," meaning that the taxpayer can receive a tax refund if the credit is greater than the estimated liability.

This credit does NOT have to be repaid, making the tax credit a fantastic opportunity that anyone considering becoming a first-time homebuyer cannot afford to miss.

For additional information, please see our frequently asked questions about the move-up/repeat home buyer tax credit.

Learn More

Further information can be found at www.federalhousingtaxcredit.com or www.irs.gov. This information is provided for general awareness only, and is not intended for the purpose of providing legal, accounting, tax advice or consulting of any kind. Please consult with your tax professional for complete details.

To find a GMAC Real Estate Agent in your community to help you understand and take advantage of the first-time homebuyer tax credit and get started finding your first home click here.

Takeaways

  • The tax credit is available for first-time homebuyers purchasing a principal residence in the U.S.
  • The law defines a first-time homebuyer as a buyer who has not owned a home as a principal residence during the past three years.
  • All U.S. citizens who file taxes are eligible to participate in the program.

Did You Know?

  • Homebuyers who file as single or head-of-household taxpayers can claim up to $8,000 if their adjusted gross income is less than $125,000, for couples filing a Joint Return the income level goes to $225,000.
  • The tax credit is only available for a short time: for the purchase of a home on or after Jan. 1, 2009 and on or before April 30, 2010.
  • The tax credit is refundable meaning that if you pay less than $8,000 in federal income taxes, then the government will send you a check for the difference.