Fridrich & Clark Realty, LLC

Provisions of the 2009 Homebuyer Tax Credit portion of the economic stimulus bill include:

•  The Homebuyer Tax Credit is $8,000 with NO payback - a true credit, not a loan!
• The credit is effective for purchases on or after January 1, 2009 and before December 1, 2009.
• An eligible property is any single-family residence, including condos, co-ops or townhouses.
• Qualified purchases include only property that will be used as a principal residence - investment or second home properties do not qualify.
• This can reduce or eliminate the buyer's income tax liability up to $8,000 for the year of purchase.  Any unused amount of tax credit would be refunded to the purchaser when the tax return is filed.
• If an individual is married, neither the individual nor his spouse may have had an ownership interest in a principal residence during the applicable three-year period.  The spouse who hasn't previously owned would not qualify as a "first-time homebuyer" even if he or she files a separate tax return.
• Individuals with adjusted gross income of not more than $75,000 or Joint Filers with combined income of no more than $150,000 are eligible.  There are phase outs for those with incomes above the caps.
• Although it is called the "First Time Homebuyer" tax credit, that is a misnomer, since, as long as the buyer has not owned a principal residence in the U.S. in the past 3 years, the buyer would qualify.  To restate -- an individual who has previously owned a home can qualify for the credit, if that ownership ended at least three years before the purchase of the home for which the credit is claimed.
• Purchasers who have a parent, grandparent, etc co-sign a loan for them would still qualify as long as the first-time purchaser's name is on the deed.
• An individual whose principal residence is in rented quarters (and has been for at least three years) but who owns a vacation home can qualify as a first-time homeowner, because he has had no ownership interest in his principal residence.
• Purchasers who utilize revenue bond financing (THDA) can qualify for the credit.
• If the home for which the credit was received is sold within three years (36 months) of purchase, the entire amount of the credit will be recaptured on the sale.

The Home Buyer Tax Credit and low interest rates make this a perfect time to consider home ownership.  Advantages to home ownership include income tax breaks for interest deduction and home equity.  However, it is important to consult a tax professional in order to obtain specific guidance on tax laws, including those pertaining to the 2009 Economic Stimulus package.  A professional Realtor can provide valuable assistance and advice on many important factors such as

• The importance of pre-qualification for a home loan
• Housing features specific to individual or family needs
• Locations, neighborhoods, and schools
• Figuring monthly mortgage payments
• Property taxes
• Home inspections

to name just a few of the many important considerations for anyone buying a home.