Please Note: The Federal Government has created an extension to the end dates of this credit, and has made a similar credit available to all home buyers rather than only 1st time buyers. We will keep you posted on these or other changes as they come to fruition.
FIRST-TIME HOMEBUYER TAX CREDIT COMPARISON
As Modified in the American Recovery and Reinvestment Act
Major Modifications Italicized
February 2009
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Plan for 2008
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Plan for 2009
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FEATURE
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CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008
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REVISED CREDIT – EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE April 30, 2010
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| Amount of Credit |
Lesser of 10 percent of cost of home or $ 7500
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Maximum credit amount increased to $ 8000
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Eligible Property |
Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.
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No change. All principal residences eligible.
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| Refundable |
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.
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No change
Purchasers will continue to receive refund for unused amount when tax return is filed.
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| Income Limit |
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $ 75,000 ($ 150,000 on a joint return). Phases out above those caps ($ 95,000 and $ 170,000).
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No change
Same income limits continue to apply.
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| First-time Homebuyer Only |
Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.
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No change
Still available for first-time purchasers only. Three-year rule continues to apply.
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| Revenue Bond Financing |
No credit allowed if home financed with state/local bond funding.
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Purchasers who utilize revenue bond financing can use credit.
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| Repayment |
Yes. Portion (6.67% of credit or $ 500) to be repaid each year for 15 years, starting with 2010 tax filing.
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No repayment for purchases on or after January 1, 2009 and before April 30, 2010
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| Recapture |
If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.
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If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased through June of 2010.
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| Termination |
July 1, 2009
(But note program changes for 2009)
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April 30, 2010
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| Effective Date |
Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year.
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All revisions are effective as of January 1, 2009
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