South Sound Properties Undressed

TAX CREDIT EXPLAINED

There is a lot of discussion about the 2008 tax credit.  Here is a quick overview.  Hope it helps!

Any home purchased for $80,000.00 or more qualifies for teh full $8000 credit amount.  The credit will be 10% of the cost ONLY if home costs less than the $80,000.

• Only first-time home buyers are eligible.  Definition of first-time home buyer is one who has not owned or had ownership interest in a home in three years prior to 2009
• This credit is good from January 1, 2009 and before December 1, 2009.  Closings must occur before December 1, 2009 to be eligible for the credit
• This credit is claimed on their income tax return by reducing income tax dollars by every dollar received as a credit.  Tax credits are applied to reduce the total tax bill
• If taxpayers tax liability ends up less than the $8000 credit, the IRS refunds the difference
• Income restrictions: Single earning no more than $75,000 and married filing joint return no more than $150,000 (Based on Adjusted Gross Income)
• Home must be buyer’s principal residence
• Most financing arrangements are acceptable and will not affect eligibility
• There is NO repayment for this credit!!
• You do not apply for credit, eligible purchasers just claim the credit on their IRS 1040 tax return form.  There will be a new form 5405 that will attach to the 1040 form
• Congress will not allow this credit to be used as a down payment, however Washington State is in the process of voting to allow homes purchased in the state to use it as a down payment.  Stay tuned!
• If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit

The South Sound Properties Team hopes this helps explain the credit.  For any further information, contact us and either Matt or myself will be happy to answer any other questions. 

There are MANY first time buyer priced homes in the South Sound region.  Let us help you find your first home, help you get qualified and hand you the key to your OWN home!