South County Mortgage Blog..........

First Time Buyers Get Better Tax Break

       First Time homebuyers can now take advantage of an expanded tax break, as a provision under the American Recovery & Reinvestment Act of 2009.  Up to $8,000 is available to qualified taxpayers who buy a home by 11/30/2009 & claim up to $8,000 on their 2009 tax returns. 

       Unlike the prior first-time homebuyer credit, this is money individuals do not need to pay back.  The internal Revenue Service has posted (on IRS.gov) a revised version of the Form 5405 (click here for Form 5405), First Time Homebuyer Credit to incorporate provisions from the American Recovery & Reinvestment Act.

 A brief summary of the tax credit provision is outlined below:

• How Much is the Tax Credit?  Up to 10% of the Purchase price or up to $8,000 max.
• Who is Eligible?  1st Time Buyers purchasing a principal residences only.
• Income Limits?  Max income for Individual is $75,000; Married Couple $150,000.
• Expiration Date?  Eligible Buyers must close 11/30/2009.
• Is Repayment required?  No as long as the property is not sold or rented in first 3 years.