Irongate Inc., Realtors

Two Tax Credits

• Up to an $8,000 tax credit is available for first-time home buyers. 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.
• Up to a $6,500 tax credit is available to any home buyer provided they have lived in the home they are selling, or have sold, as their principal residence for five consecutive years in the past eight years.
• All U.S. citizens who file taxes and buy homes within the parameters of the programs are eligible to participate in either program.

Do I have to pay it back?

• The tax credit is a true credit. It does not have to be repaid, unless you sell the home within 3 years of purchase.

Are there Income Limits?

• The new tax credits are limited to individuals with incomes up to $125,000 or married couples with incomes under $225,000. Most Americans are squarely in this range!

Are there Deadlines?

• You must purchase your new home by April 30, 2010, and close by July 1, 2010. The clock is ticking on this tax credit. The time to buy is now!

Is the Tax Credit Refundable?

• A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.
• For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.
• If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus $8,000 from the home buyer tax credit)..
• Buyers can take the tax credit on their 2009 or 2010 income tax returns.

What Homes Qualify for the Tax Credit?

• All homes, whether single-family, townhomes or condominium apartments qualify, provided that the home will be used as a principal residence. This also includes new construction.