Those of you lucky enough to have a job and are wishing to buy your first home maybe entitled to a $8,000.00 First-Time Home Buyer tax credit.  To help re start the housing market the federal government is offering First-Time Home Buyers who purchase their primary residence between January 1, 2009 and November 30, 2009 a refundable $8,000 credit. To qualify the First-Time Home Buyers must meet the following conditions:

  1. Be a purchaser who has not owned a "principal residence" in the past three years. If you are married and your spouse has owned a principal residence in the past three years you are disqualified.
  2. You cannot earn an annual income individually more than $75,000.00 and $150,000.00 if you are married. However, you are allowed to reduce your income to meet the income guidelines with approved expenses and deductions.  For more detail information on meeting the income guidelines please consult an accountant.
  3. The program allows a credit of 10% of the purchase price but the maximum amount of the credit is capped at $8,000.00.
  4. If your home gets foreclosed or you sell your home within 3 years you must pay back the credit.
  5. You must close on your new home purchase by November 30, 2009.

    You claim your credit when you file your 2009 tax returns.  You must complete form 5405 to determine the amount of the credit.  Once you know the amount of your credit you should insert that amount on line 69 of your 1040 federal income tax return.  (This post should not be considered legal or tax advice for information specific to your situation please contact Vaglienty Law Office or your accountant.)

Juan Vaglienty
Attorney at Law