2009 Tax Benefits for Home Buyers!
The main culprit for the current economic downturn is the housing market. Many say that the housing market got us into this mess, and it’s the housing market that would have to get us out. The government seems to agree with that view, and is doing to help stimulate housing recovery.
How The Federal Government will Help You with Purchasing a New Home:
With the recent passage of the American Recovery and Reinvestment Act of 2009 many new tax benefits have become available. The first time home buyer tax credit has been increased to $8,000. The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law test the home ownership history of both the home buyer and his/her spouse. The tax payer must live in the home for at least 3 years to qualify of they will have to repay the credit. These benefits are subject to income limitations. The credit applies to homes purchased from January 2009 to November 30, 2009. The credit allowable is phased out when the modified AGI (“Adjusted Gross Income”) is between $150,000 — $170,000, for MFJ (married filing joint), or $75,000 — $95,000 for all others.
The credit can be taken on the 2008 or 2009 tax return.
How the State of California will Help You With Your New Home Purchase:
The State of California has a tax credit available. This tax credit is available for qualified buyers who on or after March 1st, 2009 and before March 1st 2010, purchased a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.
Use must apply to the state of California for this credit by fax only (916) 845-9754. This Credit is allocated on first come, first served basis. Credit allocation letters will begin to be mailed no later than 5-01-09.
The state of California has allocated $100,000,000 for this credit. You can visit the state website for more information. At the site they track the total amount of credit applications recieved.
California allows qualified new home buyers a total tax credit amount equal to either five precent of the purhcase price or $10,000, whichever is less. Taxpayers must apply the total tax credit in equal amounts ove three successive taxable years (maximum of $3,333 per year) beginning with taxable year 2009 or 2010) in which the new home is purchased.
Requirements of the credit
The home must be a qualified residence. The home must:
- Be a single family residence (whether detached or attached)
- Never been previously occupied
- Be occiupied by the taxpayer for a minimum of two years.
- Be eligiable for the property tax homeowner’s exemption
If the available credit exceeds the current year net tax, the unsed credit may not be carried over to the following year. The credit is not refundable. Types of residences. Any of the following can qualify if it is your principal residence and is subject to property tax, whether real or personal property: a single family home residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home.
Owner-built property: A home constructed by an owner-taxpayer is not eligible for the New Home Credit because the home has not been purchased.
