Key Elements of the First-Time Home Buyer Tax Credit

Key Elements of the First-Time Home Buyer Tax Credit:

1. The tax credit only applies to first-time home buyers. The law defines a first-time buyer as any buyer who has not owned a home within the previous three tax years. For married couples, the homeownership history of both individuals must meet this qualification.
2. The tax credit is only available for homes purchased between Jan. 1, 2009, and Dec. 1, 2009. For the purposes of this credit, the purchase date is the date when closing occurs and the title to the property transfers to the new home owner.
3. As long as the property is purchased by a qualified buyer for use as a principal residence, any type of home, including single-family detached homes, townhouses, condominiums and manufactured homes can qualify for the credit.
4. The tax credit does not have to be repaid provided that the buyers use the home as their principal residence for at least three years.
5. The full tax credit is only available for individuals with an adjusted gross income of up to $75,000 and for married couples with a combined adjusted gross income of up to $150,000. The tax credit phases out for anyone above those income thresholds.
6. The tax credit applies for up to 10 percent of the homes purchase price, with a maximum of $8,000. For example, a first-time buyer of a $50,000 home would be eligible for a tax credit of $5,000 while a buyer of a $150,000 home could receive a tax credit of a maximum of $8,000.