Using The First Time Home Buyer Tax Credit During 2009
Buying a home for the first time is very costly, and if you’re the average home buyer, you don’t have a lot of money to spare. The first time home buyer tax credit was created in the United States to help give aid to families who would otherwise not be able to afford a house to live in.
Take note that the tax credit is slated to lose effect after the end of the year. If you are planning on buying a home, now would be the time to do it. In some cases the paperwork required to close the deal may take an elongated time, so it’s important to get the ordeal planned out as soon as possible. It is likely new tax credits will take its place, but in the event it doesn’t, it’s good to be safe.
The amount of the tax credit is going to be 10% of the purchasing price of the home, up to an amount of $8,000. Since the average home is easily slated at around $100,000, most of the applicants will likely be hitting the $8,000 maximum. When financing for the home, the $8,000 saved could easily take off a year or more in payments.
Not everyone will be able to obtain the tax credit. If you make too much income in a year, you won’t be able to apply. If you are married the rules are a bit different, and instead of a single income the government will look at combined income. In addition, the purchase must be a first purchase for you and your spouse, if you have one, in order to qualify.
Take note that the first time home buyer tax credit of 2009 won’t have to be repaid, unlike the tax credit enacted in 2008. The 2008 tax credit was more of an interest free loan, whereas this tax credit never has to be repaid to the government. Essentially, it’s free money given in hopes the purchase will contribute to the economy.
Most types of homes are eligible for the tax credit. Even mobile homes or boat homes are able to qualify for the tax credit. If you have an odd living arrangement, you should consult an accountant, who can tell you whether or not the living arrangement counts towards the credit. The only stipulation is that you can’t buy the home from a relative.
In Conclusion
Housing your family is your first concern as the head of the family. If you are not able to do so because of money constraints, this tax credit can help you afford a home. An accountant will have more information to share with you on the subject.
Learn more on Missouri Tax Credit Broker and Federal Tax Credit Broker.