by Mary Bryan Fields
The American Recovery and Reinvestment Act (February 17, 2009) provides for a tax credit for certain home buyers. If you meet the qualifying requirements, you may save $8,000 in taxes!
The qualifying requirements are: (1) the property purchased must be your primary residence, (2) you must purchase between 1/1/09 and 11/30/09, (3) the credit amount is 10% of the home purchase price not to exceed $8,000, (4) you have never owned a home or you have not owned your principal residence during the three years prior to the purchase; if you are married, both spouses must meet the 3 year rule requirement, and (5) you must live in the home for at least three years. The credit applies to houses, condos, house trailers, or houseboats located within the United States.
If your modified adjusted gross income is less than $75,000 (single filers) or $150,000 (joint filers), you may take the entire credit as provided above. However, for purchasers with higher incomes the credit phases out and eventually disappears.
You receive the money when you file your tax return, not at the closing of the purchase transaction. The credit may reduce your tax liability or increase your tax refund. The credit does not have to be repaid. The money you save is yours, not a loan from the taxpayers!