Want to Sell Your House Fast? Thinking about Selling? Want to know your homes current value? Request a FREE no obligation Comparable Market Analysis

$8000 First Time Home Buyer Tax Credit

by Jay Myers on February 24, 2009

in Texas Real Estate

Dollars are the Key

Now it is my tun to break down the $8000 First Time Home Buyer Tax Credit. I must admit, when the bill was being negotiated in the Senate, before moving forward to the House of Representatives I was following it very close, in attempt to report the results in a timely manner. But as we know now, that was a lost cause because it kept changing hourly it seemed. But now we have a signed bill, and albeit it was very trimmed down from what the Senate, National Association of REALTORS®, and the National Association of Home Builders wanted as was outlined in Fix Housing First Act article I posted, notably which would have included a $15,000 tax credit for everyone buying a home.

But there are still 8000 1 reasons for first time home buyers to pull the trigger, or get off the fence. As long as your job is secure, your marriage is stable, and you do not intend to move in the next 3 years. I am not one of these real estate agents who will chastise you for not buying now when the rates are low, and prices are down, because there are other things to consider when buying. When you are ready, I will be here ready to help. Now back to the topic.

All first-time homebuyers, which means you have not owned a home in 3 years, who purchase a home between January 1, 2009 and November 30 , 2009 may be eligible for a tax credit of $8,000 or 10% of the purchase price, whichever is less.

Unlike its $7,500 predecessor, the $8,000 does not need to be repaid.

So what does this really mean? I am going to try and give some real life examples, and answers to questions that have already been asked of me.

  1. You bought a home on January 20 of 2009, you HAVE NOT yet filed your 2008 tax return. You CAN claim this tax credit for your 2008 return. So this means, say you were already expecting a $1500 income tax refund, if you qualified for the tax credit, when you file by April 15th, 2009 you will now be getting a $9,500 Refund.
  2. You bought your first home in October of 2008, you HAVE NOT yet filed your 2008 tax return. Unfortunately, you are only eligible for the $7,500 Tax Credit that was passed last fall. Which means you will have to pay it back after 2 years over the next 15 years.
  3. Your family has already moved into their new home, that you closed escrow on February 18, 2009, you HAVE already filed your 2008 Federal Income Taxes before the new bill passed, and your refund should be here any day. You CAN and SHOULD file an amendment to your 2008 return, and claim your other $500, and prove you are eligible for the revised First-Time Homebuyer Tax Credit from the American Recovery and Reinvestment Act, which as we know now does not have to be repaid.
  4. You are stoked, and would like to have owned a house yesterday! But, you have a wedding to plan and pay for, you really did not want to spend your savings on a down-payment or closing cost. There is still time, and get some extra cash in hand for that Summer/Fall wedding. Buy a house now, even if you can not close before the April 15th Tax Day Deadline, you can always file an extension. Buy the house in the next 2-3 months, file your taxes, and get the lesser of either $8000 or 10% of the purchase price in addition to the refund you were expecting. WHOALA! More money for the wedding, and honeymoon!
  5. Last example – This goes out to those fellow self-employed folks! You want, or need a new home, you qualify for the tax credit. You are going to OWE $2,500 in taxes, and SSI for 2008. So you contact a REALTOR like myself who provides solutions, and not excuses. I sell you a home, you file your taxes, and WHOALA! you are now getting a REFUND of $5500!

There are exceptions to using this tax credit of course.

  • Individuals making $95,000 or over modified adjusted gross income, and couples making $170,000 or over modified adjusted gross income; meaning you receive no tax credit if your income is this much or more a year.
  • You buy your home from a close relative, including: parent, sibling, spouse, grandparent, child, etc.
  • You sell your home within the first three years of purchasing it. If this occurs, the tax credit must be repaid.
  • You are a non-resident alien

First-time Homebuyer Definition

A first-time homebuyer is defined as someone who has not owned a home within the last three years. If married filing jointly, both spouses must meet the first-time homebuyer definition to take the tax credit.

Homes That Qualify

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. For new construction, the purchase date is considered the day you occupy the home; therefore you must move-in by November 30th 2009 to qualify for the tax credit.

Now for a little disclaimer: I am not a Financial Advisor, a Certified Public Accountant2, a Mortgage Broker in Texas, an economist, or a Brock Lesnar look-alike :) I am a REALTOR® and a certified Texas Affordable Housing Specialist, I bring buyers and sellers together. My job is for my Buyers to pay less, and for my sellers to profit more, I represent the best interest of my clients, not my own or another agent. The information I have outlined is accurate to the best of my knowledge or what has been advised to me. Any of the tax credits can be used in conjunction with 100% Financing available with the USDA Rural Development Loan Program or the Texas Veterans Land Board.

As always, please feel free call, email, or even comment below with any questions, comments or concerns.

  1. Eight Thousand Dollars [↩]
  2. C.P.A [↩]
StumbleUponDiggTwitterTechnoratiFacebookLinkedInYahoo! BookmarksEmail

Related posts:

  1. The Extended First Time Home Buyer Tax Credit There is really not a whole lot more that needs to be said that my other article here has not already covered. Other than the dates, some changes to the...
  2. The Move-Up or Repeat Buyer Tax Credit Also referred to as the Homeowners $6500 Tax Credit follows all the same income and qualifying date requirements as the FTHB tax credit. This credit is intended to be used...
  3. $8000 Tax Credit used as Down Payment in Texas Coming Soon This is a question I have noticed entered on searches for some incoming traffic here at My Denton County Real Estate, and have been asked about more than once. I...
  4. Updated Restrictions and Income Limits for USDA Rural Development Home Financing It has been more than a few weeks since I last posted an article on USDA Guaranteed Housing program, the fact is I am working with many clients on this...

All Rights Reserved© Jay Myers (972) 510-7800 Licensed Real Estate Agent in Texas

Keller Williams Realty 2611 Cross Timbers Rd Suite #100 Flower Mound, TX 75028

Subscribe to My Denton County Real Estate's Feed

  • Hello Brenda,


    Thanks for your question. Yes, you would qualify for $2400 Tax credit if all of the conditions are met. Most importantly this will be your primary and homesteaded property.

    Don't think of it as help - A lot of REALTORS who were down on the tax credit from the beginning and the current government administration act like this is a hand-out. The fail to look at the tax credit as what it was intended for, a way to stimulate the economy. Now if everyone who got a tax credit simply took that money and buried it in a hole, or hid it under the mattress I agree that is not helping the economy. The intentions were to get people out and buy homes that were saturating the market, and for you to take that $2400,, or $8000 in most cases, and spend it at a Home Depot or Lowes improving that home, or at a furniture store, or to hire a licensed and insured contractor to paint the interior or exterior, or a roofer or whatever.

    Don't think of it as "help" you obviously have done quite well to be able to put down the $10,000 down-payment. Get your tax credit and spend it! Because if you don't someone who really does not deserve or qualify a handout will. Just my opinion. If I can help in anyway don't hesitate to call.
  • Brenda
    Hi Jay,

    Me and my husband purchased an acreage (with a house) on October 2009 for a 24,000 dollar price we gave a down payment of 10,000 and our final payment was given on April 2010 for 14,000 i was reading your info and notice that it said we can recieve 8,000 if the price was for 80,000 dollars or 10% if it was less. Does that mean that if we apply for the credit we only get 2,400 dollars. I really didn't want to apply for any help knowing that we got the lot for a great deal but people here and there we suggesting i ask about the credit. Can you please give me and suggestions on what i should do and if i should apply for the credit and if so if we do qualify for it.

    Thanks
  • cliff
    Hi Jay,

    Thanks a lot for replying to my message, you give me hope that I can receive the tax credit. Ok I will do what you suggest and find a different tax place.I'm hoping for the best....GOD BLESS AND THANK YOU FOR YOUR TIME.
  • Hello Cliff,

    Thanks for stopping by and reading everything. Sorry to hear about your dilemma. I will start with what I have said a few dozen times, I am not an attorney, or a certified public accountant nor am I an employee of the I.R.S. But with all that being said, and from the information you have provided my understanding of the tax code does allow you to file for the $8000 FTHB tax credit.

    One thing that concerns me is what you have said about "the tax place" I assume you are talking about a tax preparer such as H.R. Block or similar, and not the Internal Revenue Service. If that is the case, get a new tax place or talk to their supervisors. Even if you already filed your 2010 Federal Return, it is not too late to talk to a C.P.A. or just file the claim yourself (the link to the paperwork is to the right) Now if you are talking about the I.R.S. you need to make them understand you have not had a homesteaded property for the last 3 years. A mobile home is personal property, not real property as I have mentioned here before. Even if you had a 12+ month lease for the land, or the dirt the mobile home is on it should not matter.

    I do not typically deal with mobile homes, but there is nothing special when it comes to the tax credit, you are just going to have to establish some proof to the IRS. But I suspect the problem is with a tax preparer not as informed as they should be with the tax credit.
  • cliff
    hi jay,
    i'm cliff.i found your website i read all different comments you've got from different people,differnet problem.....
    well,i hope you can help me too...here it goes:we bought a new home last sept.1st '09....the broker said we are qualified for the first time homebuyer.......we count on it......but when we file our tax return 2010 the tax place said we are not qualified the first time homebuyer since we owned a mobile home.....yes,we owned a mobile home but we dont own the land we just rented but i pay taxes for mobile home...i bought the mobile home from my friend for only $2000....when we moved in to our new house we give the mobile home away to 1 of my friend.....and i feel bad when they said we are not qualified.....please reply to me..thank you very much
  • I replied to this by email, but never heard back. But, the short answer is Yes, the tax credit was extended and effective on November 6, 2009. Your homestead exemption is not part of the claim, all you have to submit is your HUD-1 Closing statement, once the IRS receives and validates your claim they will contact the tax assessors office to make sure the home was recorded in the name put on the $8000 tax credit claim.

    It is unlikely the homestead will actually be put in your name in the systems till after February because they are busy processing payments and everything before that, but the application date is what is importantl -- I believe you are good to go. Otherwise, and this is another way to look at it, how would all of my clients in the middle of last year been able to apply and receive their tax credits when most definitively their homestead had not yet been applied, but the deed was recorded usually within a couple weeks. I also suspect this is why some people complain about taking so long to get their checks -- the title companies they used, or sellers (as in banks) may have not gotten things recorded in a timely manner. Hope this helps, and always feel free to give me a call if I can help in any way.
  • lee
    We had all our closing papers drawn up on Dec 31st. my husband signed on Dec 31st and due to work obligations, i was not able to sign the paperwork until Jan 2, which is our funding date and the day we got our keys to our first home. On our HUD, the "closing date is dated 12/31/08 and the funded date is 1/2/2009. Do we qualify? Our realtor and broker think we do. Also, we are only now looking to file our homestead exemption, but on the paper it says "To qualify for general residential exemption, you must own your home on Jan 1...". If we are going to claim that we owned on Jan 2nd per our HUD, do we not qualify for the 2009 homestead exemption????
  • Yes Joshua, the TDHCA's program for monetizing the tax credit for a down payment ended on Sept 23rd, I did receive an email blast from them announcing they hired more people in order to get the applications already in process done before the November 1st deadline. Par for the course it sounds, took too long to put the program into effect, and then reacting to the workload rather than planning. IF the tax credit is extended I certainly hope they keep what they have in place and not take 5 months to put another plan into effect. Obviously I was not much of a fan of the monetizing program, or the amount of time it took to be usable.
  • Joshua Brooks
    When is the dead line cutt off for the 90-day DPA program. I heard that it was Sept 23 is that correct or do we still have time to get our appilcations in?
  • Hello Patricia, and thanks you for the compliments on the site.

    I am not positive on this, since I am not a C.P.A but I believe the answer is Yes. I am positive you can you apply both the energy credit, and the first timers credit. I am just not positive on how the bookkeeping would be done to eliminate the tax liability. But I believe you are correct on the $7500. I would be happy to refer you to my tax man who can answer this with certainty. One thing I do want to point out is that you can not file for the energy credit by amending your 2008 return if you installed the energy efficient unit in 2009, you would have to wait and file that before April 15, 2010 for your 2009 return. But the first time home buyers tax credit could be filed today by amending the 2008 return.

    I would advise to amend the return, get that $8000, and re-invest it into the house with the HVAC unit, after all that is what the tax credit was really meant to do other than stimulating the economy. If you would prefer to ask my C.P.A. drop me an email or call and I will put you in touch with him. Hope this helps if not let me know.
  • Hi Jay,

    Awesome website and great information.

    Here's an odd question for you regarding the tax credits. Purchased a home, closed on 09/09 and qualify for the full 8,000 tax credit. My tax liability is normally about 2,000 so I would get 6,000 back, right? Now, what if I install a qualifying energy efficient HVAC system (around 10,000) that would qualify for the full 1,500 back? Since one is a refundable tax credit and the other is not, would the 1,500 count toward my normal 2,000 tax liability and enable me to get 7,500 back or should I just go for a lower priced system that doesn't qualify?

    Thanks!
  • No, if you rent the land, and own the mobile home / trailer it is not a homestead, therefore can not claim the tax credit. You must own real property, not personal property
  • Jennifer Thomas
    My mother gave us a mobile home 3 years ago and the title is in mine and my spouse name but we pay rent on the land where the mobile home sits are we still able to qualify for the 8,000 tax credit ?
  • Hello Tracey,

    I will try to make this so I do not contradict the previous question and response. If your mobile home was NOT considered your homestead, meaning it was deeded and a permanent fixture or attached to the land, you would be eligible (with the information given) as long as all of the other requirements were met such as closing dates, income restrictions and so on. If the mobile home or trailer is affixed to the vacant land it is then considered improved property and would be deeded as so. In your case, unlike Amanda's question this may work in your favor if it was still only personal property, and not real estate. Hope this helps.
  • Hello Amanda, Sorry for the delay in responding.

    No, you would not be eligible for the tax credit, since the mobile home is not a deeded piece of real estate. A mobile home with a title is considered personal property, unless you have notified the tax assessor that you want it claimed as a homestead, and going to pay taxes on it as real estate.
  • Tracey
    My husband and I own a trailor home bought it ten years ago lived in it till june of this year when we bought a new home so we dont get the tax credit because we had the trailor?
  • Amanda M
    I own a mobile home and the land that it is on. I have the title to my mobile home. So the home is paid off but not the land. I even have to get a vehicle sticker every year. Am i eligible for the $8000? I pay property taxes only on the land, not the moble home.
    Thank you
    Amanda
  • I have added a video I up there at the top from Jay Papasan and Bryon Ellington from Keller Williams International for those of you that might prefer to watch instead of reading. ;) Be sure to check it out, they do explain the details of the $8000 First Time Homebuyer Tax Credit very well and easy to follow.
  • Hello Rachel,

    After confirming with my tax adviser, No -- the $8,000 Tax Credit will not be taxed on your next tax year. It is much like when tax payers with children claim children as a dependent, and get a refund based on that; It is not taxable income. Now, any interest you make on investing that $8,000 say in a savings account, mutual fund or REIT (Real Estate Investment Trust) would naturally be taxable.

    I also learned something else interesting I was not aware of while speaking with him. This is unrelated to Denton County real estate or those of us in Texas or states that do not have a State Income Tax, the recent Cash For Clunkers program and the $3500 entitlement is taxable. That is surely something I hope all those people who took advantage of it were aware of, I highly doubt a lot of the car salesman or financiers for those new cars made sure their customers knew that -- although I could be wrong.
  • Rachel
    Hello, When you say the tax credit does not have to be repaid does this also mean we will not be taxed on it come next April?
  • Carolyn,

    Everything I have read says 3 years; I can not say with any certainty if you should attempt buying a home this year. It would be too much like splitting hairs in order to see if you were going to receive the tax credit. But, if it were me I would be waiting till January 1st to make sure. Not to mention if you are not really eligible, as a tax payer, I don't want anyone slipping or sliding under the radar.

    Now with that being said, sometime by middle October it should be pretty obvious if legislators are going to extend or even expand the tax credits. My opinion, at this time, is that the tax credit will not be immediately be extended; in other words not run consecutive to this one.
  • Carolyn
    My husband and I sold and settled the sale of our home on December 11, 2006. I know that the deadline to purchase a home and get the credit is November 30, but if it is extended, when will we be eligible? December 12th? Or do I have to count 365 days of each year, or do they round it up to the previous or next month? We want to buy a home, but don't want to miss out on the credit if the Senate does extend.
  • Hi Leslie,

    This is a pretty easy one, although I realize if the IRS does not agree with us you may have a battle ahead of you.

    I 100% agree with the mortgage broker you spoke to, the terms such as personal property, and real property are what makes the difference here and completely accurate. Not owning the land also made it to where you were never able to claim a homestead, even more reason to call yourself a first time homebuyer. Owning a mobile home is no different than owning a camper or a very roomy tent if you don't own the land. Furthermore, since you purchased it not with a mortgage but most likely an installment loan is yet another reason. I would say get out there a buy a house, before the interest rates go up as they are predicted to do very soon.
  • Leslie
    Hi Jay,
    Great web site and articles! I've read quite a few of them since many seem to apply to my circumstances. I am a Texas veteran, currently looking to buy and I consider myself to be a first time home buyer.
    I have read many web sites on this subject but I just wanted your take on it. This question seems to irritate some people and create hostile answers, but here goes.

    First of all, I owned a mobile home, but did not own the land it sat on. The mobile home only had a value of about $4500, but I owed much more. I had been wanting to sell it for several years and was able to sell it for what was owed about three months ago. I originally bought it so that I could get into a more favorable financial situation.
    Before I sold the house I had contacted a mortgage broker who said, without doubt and very convincingly, that I was a first time home buyer. He said that the mobile home was considered "Chattel", personal property, and not real property. I believed him. And he is probably right as far as FHA is concerned, I guess. But from what I have read, just owning a "home", no matter what kind of home, makes you ineligible as far as the IRS is concerned. I personally feel like a first time home buyer because I have never owned real-estate. And I want to.

    What's your opinion on this subject? Thanks!
  • Brandon V
    HI, i've read all of those Q&A up there and haven't seen the answer to my question. The definition i read above stated as follow:

    First-time Homebuyer Definition
    If married filing jointly, both spouses must meet the first-time home buyer definition to take the tax credit.

    i'll be the first time buyer, my wife is not. but if we file our tax separately, would I still eligible for the tax credit? thanks.
  • Karen
    Hi! I have enjoyed reading the info on your site. I am about to make an offer on a home. However, I am very concerned about having the money to make the downpayment of a little more than $10K. It seems that all the programs like Nehemiah, Ameridream, etc have been eliminated. I am wondering if you know of any down payment assistance programs? I am buying in Washington, DC and have an FHA loan.
  • Hello Tee,

    I am going to be quite frank on this subject; I would not buy a house that someone is going to throw up in 2-3 months, unless the slab had already been poured a couple months ago. Too often when we see foundation issues on any and especially TRACT or SPEC homes it is because houses were built upon that land (dirt and clay) before the ground that has been cleared and quickly prepared for building had a opportunity to naturally settle. But, I am not a structural engineer that is just my opinion, I just probably look at a close to a hundred houses a month.

    That aside, If the home is not able to be lived in by December 1st, meaning it has not been cleared by the building inspectors, utilities turn-on and so forth it is not eligible to for the tax credit. Furthermore, the closing has to occur before December 1, 2009 and there is no way you would want to Close Escrow on a home before construction is complete.

    I am not a fan of most builders, it is no secret because a REALTOR typically deals with pre-owned homes. But already builders are pricing homes like the market is not down, and back to the practice of putting incentives on financing and closing to keep everything "in-house" -- this is large reason why the housing market has had a problem on appraised values, and predatory lending. Of course this is not all builders, but I would say probably upwards of 50% of home builders were involved in one of these issues. So my advice to you, if you really wanted to take advantage of your $8000 Tax Credit find a already built home that is on the market, I know for a fact there are plenty of homes in Little Elm and Denton that have barely been lived in and already being foreclosed on, and if it is a HUD Foreclosure almost for certain you are going to get it 5% or more less than the builder is charging for the exact same floor plan.

    Hope this helps, and best of luck! If I can help in anyway please contact me.
  • Tee Bee
    I am looking to build from scratch a one story this month, the builder sales agent is not sure the house will be ready by the tax credit deadline Nov 31. Any advice this or any insight to if the tax credit deadline will be extended.
  • Thanks for the question Brandon, and I have removed your last name from it ;)

    Technically, Yes -- You will need to payback your tax credit. One of the big conditions of receiving the First Time Homebuyer Tax Credit of 2009 is that you must own the home, and live in it as your primary residence for 3 years. Now with that being said, as I mentioned in the previous response to Bryan -- the IRS is obviously not doing a bang up job of policing the cash being released toward the tax credit.

    I do believe you can/should wait till you file your 2009 tax return before repaying it though. That way you can have other exemptions to lower your taxable income such as expenses from the job relocation, property taxes, and interest on your loan. That way the sting of paying it back may be offset a little and not hurt as much. I am pretty sure you can also pay it back on a re-payment plan, with interest of course. Again I am not a C.P.A. or an attorney.

    As for renting your house please understand that your property taxes, if you currently have or when you purchased it had a homestead exemption on it will increase your mortgage amount if you are escrowing once you lose your county homestead exemption, in Texas that will increase the taxable value $15,000. Too often people forget about that when determining the rental amount.
  • Brandon A.
    I have a question I bought a house in 2009 and received my 8,000 tax credit, however because of my job I now have to move four states away. I plan on renting out my current house that I bought this year. Do I have to pay back the 8,000 credit next year since I will now be renting it out?
  • Bryan thanks for visiting and your comment. I have to say when I read this I was shaking my head in disbelief and disgust of some professionals. Let me start with, rather than ending with my little disclaimer; I am not a Certified Public Accountant, an attorney, or licensed to practice real estate in Arizona.

    For starters, you said "tax lady" I am guessing this was not a C.P.A. because I surely hope a licensed accountant is not "recommending" to anyone to take advantage of the tax credit who is not eligible. A credit is for something that has already been done. It would be the same if you filed for a tax credit for making a home more energy efficient, you are not suppose to claim it till it has actually been done. I would strongly encourage you to contact a C.P.A. or an attorney, or even the IRS hot-line and get this corrected. With all that being said it is also disheartening to think how the IRS even paid it out to you without confirming you purchased a home. Just to think of how many might be out there committing fraud using the First Time Home Buyer Tax credit intentionally is very sad for this economy.

    As for buying now or the near future, and just calling it even so-to-speak -- I wouldn't! I would get this resolved, if you can not close until December 2, 2009, as of the time of this writing, there is no tax credit. There is much speculation about the credit being extended, or even expanded to everyone, I do not believe this will be confirmed or denied until October or even later. Again, not a CPA -- but yes I believe you will have to pay interest for sure, and probably a penalty. I hope your tax preparer signed your 1040, that may dismiss a penalty.

    As for as your home hunting dilemma and being outbid, and fearing of missing out on the first timer credit, I believe it is justified. I wrote this article recently addressing the exact same situation cautioning those that are waiting to buy a home in a market riddled with short-sales and foreclosures. It is a tough affordable home market when first time buyers have to compete with investors, cash buyers, and downsizing buyers. I also realize Phoenix is saturated with properties that take forever to get an accepted offer because of the number of short-sales and REO's.

    My advice to you is pick and stick with a REALTOR that is experienced and confident with short-sales and negotiating. You did not mention if you were unhappy with your agent, but naturally if you are find a new one or email me and I know several in Phoenix that are like-minded as I am on getting deals done, and the importance of negotiating and saying what needs to be said to you, the selling agent, or even the seller in some cases. I can't see missing out on more than 2 or 3 properties, more than that and your agent may not be telling you what you need to hear.

    I hope this answered most of your questions, or at least confirmed some of what you were already thinking. As always, even if you are not in my service area of Denton County Texas, feel free to call or email any questions, comments or concerns.
  • Bryan MacFarlane
    Last year, when I filed my taxes (year 2008, April 2009) I was in a situation where I owed the IRS 2500. In talking with my tax lady, I mentioned that I planned on buying a house this year and she recommended that I go ahead and take the 8000 dollar credit. This meant that instead of owing, I received a refund of 5500. This was great at the time. I have been actively looking for a house, in Phoenix AZ, for the past 3 months. I have limitations in the total amount I can spend and am battling with bank owned, short sales, etc. Long story short, I have been outbid on all houses I have attempted to buy so far. To the point where I am getting worried that I will not be able to find a house in time to close escrow before Dec 1st. In reading about the credit, there is lots of information on how to get it, but not on how to return it. Seems like I could pay back the IRS 8000 plus the 2500 that I owed. Is this the case? Is there penalties associated? What if I do find a house and cannot close escrow until Dec 2? Any answers you could give me would be greatly appreciated.
  • Hello Erica,

    Congratualations on being a Homeowner. As long as you meet all the conditions, most importantly no one in your "household" has owned a home in the past 3 years, and the home was purchased between February 1, 2009 and December 1, 2009 -- You do qualify. As for the $8000, if the home you purchased was more than $80,000 you would receive the tax credit for $8,000, if the home was under, it would be 10% of the purchase price.

    Claiming your return, can either be done by filing an amendment to your 2008 return, or waiting until after January 1, 2010 when filing your 2009 Federal Tax Return. In either case this form from the IRS is what would be used. You can do this yourself, or if you use a tax preparer such as H&R; Block or Jackson Hewitt and others, or even your person C.P.A. can do it for you. I have been told they can charge anywhere from $85 - $190 to do this for you. The IRS website does have all the steps to go through in doing yourself, so naturally I believe in keeping the money in my own pocket rather than paying for someone to fill out 2 -3 pages. Hope this helps, if not feel free ask.
  • Erica
    I'm a first time home buyer and I just bought a home in TX, do I qualify? and if so how would I go about getting he 8,000?
  • Tiffany,

    Sorry to hear it is taking so long to get your tax credit back. Most of the people I have talked to have received the credit back within 3 weeks if filing electronically, and 8-10 when filing by mail. But I know that cannot make you feel any better.

    Unfortunately, I am not really qualified to offer concrete advice on how to handle your situation. I really should get a CPA to come on here as a Guest writer and advise on these issues.

    But, from what I have been told it is best not to re-file a return because it can really put things out of whack. Since the IRS runs at their own pace there is a chance they may try to start processing both simultaneously. I would suggest calling a tax preparer and inquiring what they would advise. Or if you can gt a live person on the IRS Hotline @ (800) 829-1040 and see what they suggest.

    Good Luck!
  • Tiffany
    how long should i wait b4 i refile my amended return the irs still doesnt have it in the computer yet an this is week 11
  • Hello Jessica,

    Thank you for your question, and I love it because it is not one I have seen yet.

    I am going to say No, You would not be disqualified. But with a couple big honk'in asterisks.

    The American Recovery and Reinvestment Act of 2009 states that single family residences, townhomes, condo's, mobile or modular homes and even houseboats are eligible for the FTHB Tax Credit. As long as you meet the requirements such as, but not limited to, the eligible income limits, must be occupied as your primary residence, and you cannot have purchased it from a family member. As long as this property is not deeded as a multi-family unit, or being purchased as an income property I believe you are safe. Since you mentioned this as "rental unit attached" I assume we are talking about a garage apartment, or an in-law suite and not a duplex or even a triplex. So that got me thinking:

    Say you bought a 5 bedroom 2.5 bath home in Flower Mound, and then later you realize "Wow this house is big for 2 people, and these electric bills are drowning me" But you have a sibling, or maybe even a newly divorced friend that wanted to rent a bedroom in your new big 'ole house.


    This would be a similar to your rental apartment. I have not read anything in all my research with the tax credit, or first time homebuyer programs that says you can not use your space as you want, as long as you keep living there too and for at least 3 years to not have to pay it back. You should not be disqualified from the credit just because you are lucky enough to be buying a property with a separate entrance, or a small 2nd kitchen.

    Now for a disclaimer. With the information you have given this is what I am thinking, but by all means if you want to share more specifics please give me a call or email me with more, or contact a real estate attorney, or perhaps even a CPA. Once you file your form 5405 to apply for for your tax credit after purchasing; if the address will be deeded as a single family residence with you as the owners, there is nothing to worry about. This is the most important thing, now if the property is deeded differently, or you are buying the property and the renters are coming with it, this could open up a whole new can of worms.
    My CPA tells me this is what the IRS is going to be checking, on the amended returns he has done so far he has been sending a copy of the HUD-1, but they are not even asking for that. So that means the IRS must be checking with county tax appraisers to confirm the legitimacy of the 5405.

    Hope this helps, if not contact me
  • Jessica
    My husband and I are first time home buyers and considering buying a place but it has a rental unit attached. We are planning on living in there but are wondering if we rent out the rental unit, would we be disqualified from receiving the $8000 First Time Home Buyer Tax Credit?
  • Denise
    My sister and I are interested in taking advantage of the first time home buyers tax credit. We know that it can be used as the down payment for the house, but what we are wondering is would we only get $8,000 together as first time home buyers? Or would we get $8000 a piece totaling $16,000 that we could use for the down payment since we would both be first time home buyers.
  • Hello Meiling,

    I must say I hope I am reading your message incorrectly. But I do not believe I am and it is more than a little disconcerting. The purpose of this article to announce that Coming Soon First Time Homebuyers will be able to use the tax credit for a downpayment. And the one I am waiting to write -- once there is a real way to do it -- is How to use the $8000 Tax Credit as a Down Payment.

    There is currently, and certainly not 6 weeks ago a way to get the tax credit before purchasing a property. Furthermore, even if there were a way HUD and FHA want it to be done simultaneously. Meaning:
    <ul>
    <li>You would find a house</li>
    <li>You apply for the mortgage</li>
    <li>A "bridge" loan or a "gift" would be would be applied for from a State agency (This is the part that is still up in the air)</li>
    <li>Then -- once a successful purchase has been made the down payment assistance would be granted.</li>
    <li>Once the Tax Credit is received from the IRS you would pay back the bridge loan, or the state agency that granted the funds. In Texas this will hopefully be TDHCA, or a City or County Housing Program.</li>
    </ul>

    Again I will stress, all these real estate agents and mortgage brokers are posting "Good News..blah blah..." and then simply directing their readers to a news release that was announced in Washington D.C. over a week ago at a Realtor Convention. Not explaining how it can be done, or when. The news release basically only says HUD and FHA are going to allow it. I wrote back in March this was going to be allowed, based on a program from Missouri and now Iowa have put in place. BUT, As of today there is still not a program released in Texas that is anything more than a high interest rate loan, with a servicing fee tacked on available.

    So back to Meiling's comment. I truly hope you just filed a tax return, and misunderstood the purposes of the $8000 Tax Credit, and will just get back your return without the $8000. My fear is that you paid someone who took advantage of you, and mislead you and your mother on what the purpose of the tax credit really is for. A credit is an acknowledgment of something, therefore you can not receive a credit without doing at the very least your due diligence, which in this case is purchasing a home as a first time home buyer.

    If you, or anyone for that matter has any questions, comments or concerns please call me, I am pretty sure I can clear most of these things up.
  • Meiling Perez
    Hi my mother and I applied to get the $8,000 to buy our 1st home. We did it about 6 weeks ago and we have not received an answer. How would we be able to get an update or a follow up on tax request.
    FYI: we have not bought our home yet, were waiting for the money.
    Please help.

    Tank you
    Meiling Perez
blog comments powered by Disqus

Previous post:

Next post: