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$7500 First Time Homebuyer Tax Credit
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Update 2/12: The $15,000 provision has been replaced by an $8,000 first-time home buyer credit, according to the Wall Street Journal. The credit is set to expire November 30th unless it is extended (which is currently being discussed).
Senate Republicans added a provision that would make the credit a $15,000 tax credit for all home-buyers, not just first time home-buyers. It would also be a true credit, not a “credit” you have to pay back over 15 years.
One of the big pieces of the housing rescue bill, passed and signed into law in July, was a $7,500 “tax credit” for first time homebuyers. While experts aren’t sure whether it’s “going to work,” these types of tax credits have been used in the past so they do have some history.
There is one aspect of this bill that is surprising and it has to do with one of the qualification rules. You can own a vacation home or a rental property and still qualify for this tax credit. I don’t know if it’s an oversight because of the strict determination of “primary residence” or if it was an intended rule. I don’t think individuals who own rental property or vacation homes necessarily need assistance on buying a primary residence.
First Time Homebuyer Tax Credit Rules
To qualify, you must satisfy these conditions:
- The home much be purchased as a primary residence.
- You must not have owned a primary residence in the last three years. For couples, both individuals must not have owned a primary residence in the last three years. Vacation homes and rental properties don’t affect this (you aren’t DQ’d if you have a vacation home or rental property).
- Must not be a non-resident alien as defined by the IRS in Publication 519.
- Individuals must have a modified adjusted gross income of less than $75,000 annually and couples MAGI of less than $150,000 to qualify for the full amount.
- The phaseout range begins at $75,000 and ends at $95,000 for individuals, $150,000 and $170,000 respectively for couples.
- The home must be closed between April 9th, 2008 and July 1st, 2009.
- No mention of a credit score or history requirement, but knowing that will help when it comes to getting a mortgage. I recommend checking out myFICO.com, a service of Fair Isaac, the people who invented the FICO credit score.
How the “tax credit” works:
- The tax credit is 10% of the home’s sale price with a maximum of $7500.
- You can claim the credit on taxes filed in 2008 or 2009.
- It’s a credit and not a deduction (difference between tax credit and tax deduction).
- “Tax credit” is a misnomer because it’s really a zero percent loan with some qualifications.
Tax Credit Loan Repayment Terms
The tax credit isn’t really a tax credit, it’s really just a tax free loan with some qualifications. You have to start paying back this loan within two years and you make equal payments over 15 years. When you sell your home, any profits will go first into paying off that loan. If you sell at a loss, the difference will be forgiven… meaning you will not owe any money on the loan (though it should be recorded as income as is typical with most loan forgiveness agreements, so you will owe taxes on it).
Should You Do It?
I would, why wouldn’t you take an interest free loan? 
(Photo: orvaratli)
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I will be closing on a house in about 4-5 weeks. I have not filed for my income taxes as of yet. Can anyone tell me that once I file and if the 15,ooo tax credit passes, how it will be distributed? Will it come in one lump sum or in partial payments? Will this be in addition to whatever refund that I would normally be getting back also. How long does it take?
I bought a house in October and have already filed my taxes.. Since the 15,000 tax credit didn’t pass, you can still take the 7500 tax credit. It does have to be repaid, 500 a year starting in 2010, but who cares a no-interest loan.. Fantastic!I took advantage of this credit myself… I did my taxes on line myself and just followed all the questions. It asked me if I was a first time home buyer and i said yes. It figured out my refund for me.. I qualified for the whole 7500. That money was added to the rest of the money I was getting back, therefore making my total 8600.. I e-filed my taxes about a week ago and opted for direct deposit. I checked the irs “where is my refund” page today and it said that my refund should be deposited this friday the 13th. So once you file you should get the full amount of the credit and the rest of your tax refund. I hope this helps you….
I’m not understanding the forum – if you go to CNNmoney.com and read about the new proposed $15000 tax credit – it indicates that it is non-refundable. That means that if you don’t owe $15000 in taxes you will not get a refund – which sucks. I’m building a house based on the premise that I would have gotten the $7500 back to repay the money I had to borrow as a down payment. If this new bill passes will the old one go away – the $7500 tax credit? This new bill for $15000 makes no sense and will not help me in any way if it is not refundable – I don’t have to pay taxes so what is the benefit for me – what it has done is completly messed me up. It looks like we are getting screwed. I would like for nothing better than to be wrong – so can someone help me out here? Thanks
If this 15000 credit is the only reason you are building a house then you have issues. You should have waited and researched without blindly jumping into home ownership. This is your mistake, not the governments.
The “old” 7500 isn’t a credit anyway. It is a loan that you have to repay.
saladdin
I’ll also add that shouldn’t you just be happy you are one of those that do not pay taxes?
Isn’t that benefit enough?
saladdin
Everybody pays taxes: sales taxes, service taxes, fuel taxes, and if Sharon owns a home she’ll pay property taxes. Also, alot of people who can afford a mortgage payment have trouble coming up with the down payment.
The real question is – does somebody who makes enough to pay $15,000. in taxes need a credit?
They can even own vacation or rental property under the Senate amendment.
Further, you have no way of knowing the circumstances of Sharon’s life. I lost my career and savings due to catastrophic illness without medical insurance. I still pay taxes on my disability (private insurance that I paid for while working).
Your the one with issues.
It doesn’t take a genius to figure out the poster is talking about income tax. Stop trying to seem smarter then you are.
If you have trouble coming up with a downpayment for a house you are in no situation to buy a house anyway. Ever.
You paid for disablity insurance out of pocket but not medical insurance?
saladdin
SDDave – thanks for your response and kind remarks – BOY – the hatred on this board. I have a Masters Degree and had a decent job making decent money until my department was outsourced 9 months ago. I immediately landed another job but as a contractor with no benefits. I was told that the job would turn into a permanent position but because of the economy this is not going to happen. My parents loaned me the money for the downpayment so we wouldn’t have to go into our savings AGAIN. The only reason that I’m providing this information is because of all the asinine people that felt a need to lamblast me for saying that it sucked that the $7500 credit may be sunset by the $1500.00 credit. Yes I stared building a house based on the fact that I would receive a refundable tax credit of $7500.00 – every little bit helps. When I applied for the credit it was not free government money – it had to be repaid – who wouldn’t take advantage of an interest free loan and Yes I fully understood the terms. I suggest to all the idiots who felt a need to be so mean spirited with their idiotic responses to get a freaking life and go back into the hole you crawled out of.
You should do your research first before complaining jumping into something like a new home and then complaining about not getting free money.
They were trying to pass a bill that bumped that 7500, up to 15,000. Since you have to repay the 7500 it isn’t really a credit, so the government was trying to see if they could make it 15,000 and make it not repayable, therfore it would be a true tax credit. That would mean that they would just give you 10% of the cost of your house for free, but since the government didn’t pass it we now can only get a max of 7500. and it has to be repayed…
You are lucky you don’t have to pay taxes!! First, your an idiot for trying to “build” a home based on the need for $7500 that you have to start repaying in two years with equal payments. Second, you sound like your complaining and wining, it’s not the governments fault. . .its yours.
Well guys it looks like they wiped out the $15k idea, oh well. The $7500 is still a sweet deal and I’ll take it. Also a final note to all the winers and tax evaders, better luck next time scamming money out this country. You should be ashamed. You are the reason this country is in this mess,,,Losers!!!!
I bought my first home in October 2007, then refinanced January 22, 2009. Does this count as eligible for the tax credit?
Kmm – unfortunately, you cannot claim the credit if you only refinanced. You must be a first-time home purchaser. Sorry.
actually kmm…. if this new revised bill passes tomorrow. It looks like you will be able to.
I bought my first home on January 31, 2008 and I am strugling to make my house payments. I didn’t qualify for the first time home buyers tax credit because my home was purchased before April 9, 2008. I feel like my hands are tied. All I can do is write a letter to my Congressman. If I could refinance my mortgage at a lower rate, that would help me out, but the rates aren’t low enough yet. I hope I can make it until the rates get lower.(If they get lower). It seems to be my only hope.
Well it looks like a tru $8000 credit for Jan 1-August 31st 2009 might get signed, that sounds good to me, what does everyone think of that?? I have’nt heard the details yet has anyone else??
Ronnie: that sounds right – but only for first-time home buyers who meet the existing income requirements, etc. Nothing for general repeat homebuyers.
I purchased my house October 2008 and qualify as a first time home buyer. The Housing and Economic Recovery Act of 2008 is for homes purchased between april 2008 and july 2009, but after reading about the home buyer tax credit in the stimulus bill it says it’s only for homes purchase after Jan 2009. Am I reading this correctly? Is the home buyer tax credit in the stimulus bill the same as the tax credit passed in 2008?
It is and it isn’t – if you bought (as a 1st timer) b/t 4/08 & 12/08 (and you qualify in all areas), you get the refundable (but repayable) credit. If you bought in Jan 09 – Aug 09 you get $8,000 and no repayment requirement. That’s how I read it.
I am settling on my first home purchase next month and have been trying to get the final details. Can you give me the website you’re using to get this info?
I’m not getting from one website – it’s a mixture of cnn/cnbc/foxnews/wall street Journel, etc. However, nothing is final until it is signed into law.
Is the $8k in addition to the $7500 (total $15,500)?
No this is not in addition to the 7500 it will be one or the other.
We filed our taxes and already received the $7500. Is there a way we can file an amdendment for the $8000 and return the $7500 loan?
my sister has to co-sign or co-borrow with me on my homeloan but i will be the resident she resides in another state, it has been 5 years since she owned a home—will i still qualify? if yes, who will the credit go to me or her?
If I added my 22 yr old son as of(1-09) who lives with my wife and I, to our grant deed, will my son be eligable for either the 7,500 or the 8,000 new home buyer tax credit when he does his own taxes?
It doesn’t seem so. Your son would have to actually have to buy a home from a non-relative (in addition to other requirements) to qualify. Just adding him to a deed is not equivalent to buying a home in an arms-length transaction. Sorry.
Does anybody know if the rules are changing on the 8000? Do you get the whole 8000 when filing your taxes this tax season like you did the 7500 if you didn’t owe? or is it just a smaller version of the 15000 tax credit that only applies to taxes that you owe?.
My wife and father bought a home in 2004 (he was the primary co-signer on the loan because my wife did not qualify). We lived in the home until april 2008 because we moved. He sold that home in April 2008 and I bought a home in May 2009 by myself. Just wanted to know If I qualify. My wife was on the original loan, but not the primary owner. Thanks
My daughter bought a house in July of 2008 and filed for the 7500 tax credit and was approved. Since this 7500 is not really a credit but an interest free loan that has to be repaid, how is it affected by the new 8000 tax credit which does not have to be repaid? it does not seem fair that the 7500 has to be repaid, but the 8000 does not. Will the 7500 be forgiven and not have to be repaid back over 15 years? Anyone have information on this?
Life, nor the law, is fair. The IRS will make sure she pays it back and will reduce her yearly refund by $500 or send you a nice little letter asking for the money if she doesn’t owe taxes for that year. THose who purchase after 1/1/09 (and meet all requirements of the 1st timer statute will not have to pay it back. Fairness, I’m sure, was never a consideration of any of the lawmakers. At least she gets a 15-year interest-free loan – many get the big goose egg!
At least you are lucky enough to qualify for this interest free loan! I closed on my house just a week before the effective date. Too late to qualify for the credit but early enough to be stuck with an astronomically high interest rate, courtesy of the beginning of the housing crisis.
Sure doesn’t seem fair. I’m in the same boat as many on here. Closed in Aug. 2008 and just got laid off in January. $8,000 for free sure seems a hell of a lot better than $7,500 that you have to repay, but things could be worse. Could have closed in March of 2008 and qualify for nothing at all. Just have to be grateful for what you can get, even if you have to repay it. I just want details on how to repay early if possible. And great comment from “T” below about investing it in a CD.
An interest free loan is impossible to come by in today’s economy, so I’d say take it. I am just hopeful that perhaps sometime down the line, our administration will forgive some of this loan perhaps, realizing that things were really bad already before 1/1/09. As of today, 2/17 the bill does not adjust the repayment provision for the $7,500, but I am hopeful someday it might. Got 15 years to figure it out, right?
Good luck and peace to all.
I’m in the same boat. I closed at the end of February 2008. I have been wondering if it is legal for them to arbitrarily set a date like that since most tax laws by precedent cover the entire tax year. Perhaps it needs to be challenged.
At any rate, last week I was talking to a friend who is a tax preparer and she said that there is “talk” about extending the 2008 dates (to include the entire year) and making both the 2008 credit on that doesn’t have to be repaid as well.
whoop….I meant to say making the 2008 credit “one” that doesn’t have to be repaid as well.
Hi, I am getting ready to buy a house and was of course devasted when the socialists we call our government eliminated the 15k tax credit at the last minute. that said, my income is too high to qualify for what obama defines middle class (75k or less for single filers). My girlfriend however, fits right in, the problem being her credit is so crappy that the bank won’t approve the mortgage with her on the loan. is there any way I can put her on the deed or create a notorized contract between her and i that would indicate this as a joint purchase, even though my name is soley on the loan however both our names would appear on the deed? We really need the extra money for repairs to the house and any advice is appreciated. thanks
cj,
Are they basing your total income of over 75k or your AGI of 75k? If they are basing on your Adjusted Gross Income you can sometimes have tax deferred items, such as 401k, medical insurance premiums that could bump you below the 75k max. This is assuming you were making slightly over the max of 75k.
thanks Jason, no unfortunately i’m not close..i live in an area that has a high cost of living so my 125k salary really doesn’t make me a rich man, on top of the fact that i’ve only been in the work force for 3 years i dont have much in the way of savings.
So you are complaining that our “Socialist Government” isn’t taking (as much) money from other tax payers to give to you? That seems like a logical complaint.
I bought my home last year and I and my husband are first time home buyers my closing date is march 26th. It is farly close to that April 8th or 9th should i try to get the credit? if I do not qualify that will not be fare I have never bought a home never nor my husband.
I would not try. When you clam the credit, they will ask for Purchase Date, Property Address, and Property Type. If you took the credit, you would have enter the closing date in 2008. This would eliminate you from the credit and if taken im about 99% sure you would be audited and have the pay the $7,500 back with Interest in a lump sum.
hope that helps you..
Jason
You can’t be serious!? The dates specific for qualifications they are not ball-park figures to “try for”. This isn’t horseshoes.
Narich244
So you are saying is “to not do this at all”? Well I have a friend that will be calling IRS tomarrow and i will go with what they say I will also come and write to all of you what they said. And this only for the state of califonia.
I am getting ready to buy a house and was of course devasted when the socialists we call our government eliminated the 15k tax credit at the last minute. that said, my income is too high to qualify for what obama defines middle class (75k or less for single filers). My girlfriend however, fits right in, the problem being her credit is so crappy that the bank won’t approve the mortgage with her on the loan. is there any way I can put her on the deed or create a notorized contract between her and i that would indicate this as a joint purchase, even though my name is soley on the loan however both our names would appear on the deed? We really need the extra money for repairs to the house and any advice is appreciated. thanks
Sorry CJ, I couldn’t help but chuckle at how you started your commentary..you were “devastated when the socialists we call our government eliminated the 15K tax credit at the last minute.” Very clever passing reference to our socialist government, all the while upset these socialist aren’t giving away even MORE money?..lol That is rich!! Thanks for starting my morning with a good chuckle.
You beat me to it Jeff. Very funny stuff from CJ.
saladdin
I refinanced a home that was in my mother’s name. My boyfriend co-signed for it. Could either he or i get the credit? It is our first home.
Until the Senate and House both pass their bills and then hammer out their compromises in committee we don’t have anything final to make decisions based on. For example, the question of having to repay the $7500 credit if you took advantage of it. Or how much it will ultimately be, or if it will be refundable or not. But it seems that if the Senate has given up on the 15k and making for everyone then that part is dead in the water.
Don’t forget for now we still have to pay it back. What you don’t spend, try investing in a cd and pay the government back using the interest money.
okay here is my situation. I am married and recently closed on a house. I could not finance the house with my wife because she is considered a 1099 (self employed) at her job(something we really never payed attention to) and only has been there about 5 months which makes here ineligible for the loan as far as the lender is concerned. Will we be eligible for the full tax credit since we will be filing jointly?
Robert – I guess the main question is have you OWNED a main home in the last three years (prior to this recent purchase, of course). Also, are you eligible with respect to all of the other conditions of the credit (income, etc). The fact that you financed it yourself (without your wife on the mortgage or deed) doesn’t make a difference, I believe. Look at Form 5405 (go to IRS website), and go thru all of the requirements. It’s pretty straightforward. Good luck!
Hello,
My fiance & I are both first time home buyers. We are about to purchase a new home. It is being built and is estimated to take approximately 6 months. If we have put a good amount of money upfront when we signed the contract, do we still qualify for the 0% loan even though the house will only be finished sometime in August? I assume the closing will only be after the house is finished.
Looks like you may be luckier than those that closed before 1/1/09. The instructions for the current repayable tax credit say you may count the date you actually move in and occupy the propery rather than the closing date of the loan – so it looks like the July ‘09 date on the current one won’t hurt you.
We purchased our home Nov 25 2008. That is within the time frame to qualify for this loan and it is our first home. I plan on using Turbo Tax again this year. Is there a place on there that i can claim this or will i need to do my taxes another way to claim it?
S- you are eligible for the repayable $7,500 loan not the $8,000 credit. In other words, you will start repaying this loan (in $500 increments) in 2010, I believe, if you claim it on your 2008 taxes. Just access the IRS website and search “Form 5405,” I believe. It should tell you what you need to do.
I used TaxAct to prepare my taxes. The life events Q & A under the “purchased a home” section covered this and took me the correct form and increased my refund amount by the $7500 credit. I am certain Turbo Tax will be the same. I am going to wait to file for a couple of weeks to see if the will back the non-repayable $8000 to cover the 2008 repayable $7500. If not, oh well – like others have said it is still a no interest loan that I can use for 15 years.
Another restriction that hasn’t been mentioned is that you are not eligible if you utilized a government first-time homeowner program when purchasing. My home closed on exactly 4/9 and I was thrilled that I made it within the stimulus period, but since I used a state first-time homeowner program and it paid about 5000 towards my purchase, I’m not eligible for the 7500 (or 8000) now. The 5000 I did get was a great help, but it came with a TON of restrictions including having to pay a good portion of it back if I sell within 10 YEARS. I have my fingers crossed that this stimulus package will help me. I’m glad to be a homeowner, but I lost my job (my office closed completely) a few months after I purchased and I’m pretty stressed out. I feel like I’ve done everything right – working hard, saving money, keeping my credit score really high, doing a ton of research to find a way to buy my first home relatively young etc. I got a great deal on my home and I know things will get better, I just hope I can get a little relief to survive until then.
Hello Emme-
We just closed on a home in July of 08. We signed up to use a local Chicago program called TaxSmart. We have not yet taken advantage of this program- It would give us a credit of 20% of yearly interest paid come tax time (haven’t done our taxes yet). Yours is the first post I’ve seen that makes the stimulus 7500 incompatible with any other. Are you sure? How do you know?
Best of luck to you, hope we all make it through!
Hi again-
I called the IRS today. I closed in July of 08 and I can only get the 7500, and must repay over 15 years. Really, I shouldn’t say only. It’s pretty awesome. Also, I used a local program called Tax Smart, and they said I can use that along with the 7500 credit. It turns out the form I have to file for tax smart is a federal form. hope that helps.
Hi,
I have purchased a home within the acceptable period and my son co-signed me on the loan. He owns a home already. My yearly income is only 10,000 a year. After standard deduction I won’t owe any taxes. Will I still get the 7500 credit? My concern is 1) I don’t owe enough for the credit and 2) My son owns a home.
I closed on my house 1/5/09 and filed my taxes today using the existing $7500 credit. If the $8000 credit is passed will I get an additional $500 and be free of repayment obligations? Will I have to refile or will this happen automatically?
I am in the same boat as James. Bought a house and closed on 1/30/09. I have already filed the $7500 tax credit on my 2008 taxes and gotten the refund. Can I ammend my return and get the extra $500? Will I have to pay this back over the next 15 years???? If someone knows the answer to this, PLEASE let me know!
Hi,
I just got off the phone with the IRS. I bought in Jan 09 and included the 7500 on my tax return. They said I can just complete a 1040X and will get the additional $500. They said that it is not limited by the tax liability (I thought I read it is only up to the taxes you actually owed). They said the amendment will switch it into non-repayment status. Even if you do not complete the 1040X, since you entered a purchase date of 2009, you will not have to pay it back.
I bought a house that was a bank repo. We closed on 2/28/2008 but did not move in until after April 2008 since there was major reconstruction to do. Can I still qualify for this credit or did I “miss it by that much”?
My husband a I bought and old fixer upper in April of 2008, but we closed April 4rth! Does this mean we do not qualify for this because of being off by 4 days??!!!
I am in the same boat. I closed on my house on the 4th of April also. I hope we can qualify.
Allison – unfortunately, it appears you do not qualify for the credit. Sorry.
Any idea on what happens if you were a first time homeowner and closed on your house before the 1/1/09 deadline (12/1/08 close). I would have qualified for the $7,500 “loan” – but it looks like the dates for the $8,000 credit that does not need to be paid back is post 1/1/09. Will I still get the $7,500? Will I have to pay it back?
Thanks.
I have the same question. I bought my first home in May of 08.
From what I’ve read, we are eligible for the $7500 that needs to be repayed starting 2010 and NOT for the new credit.
That is correct. You get the $7500 and you have to pay it back. Doesn’t seem fair does it? The same thing happened to my boyfriend. It’s not like it would have been that many more people… since it was only in effect since April ‘08.
MD
If your son just co-signed on the loan and is not actually in title to the property which is the typical way it is handled with FHA financing then you should be eligible for the $8000 tax credit.
I am in the same boat as Allison. I closed on my house on April 4th and moved in around the 12th. I am very curious if we will qualify.
I am a non-resident alien here in the U.S., but beacuse I have been living here for some years, I am considered now a resident alien for tax purposes, do you know if this mean that I could get the benefit of this tax credit?
You don’t want to be an american, but you want our tax benefits?
I bought my home in 2008 before the first-time homeowners tax credit. Is it just bad luck or are there any other provisions? (I don’t live in D.C.)
Thanks
Tony – you’re out of luck with respect to the $7,500 credit but maybe your state has its own 1st time homebuyer credit. I would look into that.
Craig – I think you’re out of luck. The IRS considers the date you bought the CLOSING date (unless you were constructing a home, then it’s the occupancy date). Sorry – no credit.
My girlfriend purchased a home 2 weeks ago, my Mother had to cosign the loan for the approval. My mom hasn’t purchase a home in 15 years, but my girlfriend is a first time buyer. Does she qualify for the credit? It was purhased directly from a bank (Foreclosure). Please help me??????
JS-
I’ve had the same question on this site for months — does the credit apply to land contract, contract for deed or any other seller-financing arrangement. I’ll be eternally grateful to anyone who can shed light on this aspect of the credit.
My husband and I purchased a home on March 28, 2008. The house was under construction (new heating system, electric, windows, doors, etc.) so we were unable to move in until December of 2008. According to form 5405, it states that you should enter the date you first occupied the home if the home was constructed. Do we qualify for the tax credit? Thanks for your help.
I went and did my taxes and they told me i can not clam the 7,500 with my own taxes together, because we was going to wait to do our taxes utill we closed in our home and that will be in april 15th.
I bought a house in Aug 2008 with a friend. We are 50/50 on this house. Are we both able to get the $7500 loan or just one of us?
Brian – you both will have to split the $7,500 loan (in whatever manner you want). However, you both can’t each get $7,500.
I recently filed taxes under the impression that I would qualify for the first time buyer credit with 0%. Now, with the new 8000 credit, will I automatically have to not pay back the loan or will I have to amend my tax return?
Just wondering if anyone has got there normal tax refund and first time home buyers tax credit, and are there any problems I should be aware of.. I wanted to wait and see what happened after the bill passed, before I filed my taxes … I am kinda ticked off because me and my wife closed on 12/15/08 …it’s kinda of amazing 16 days can make such a big difference. I just think they should have piggyback the two credits… Because if you bought a house on Dec. 31 2008 or Jan 1 2009, whats the differance, we’re all stuck in the crap storm of an economy… sorry just had to vent..
It is NOT a loan per the 2008 7500 tax credit. This is an 8000 freebie.
Hello, I have A question that I am not sure about. I bought a house Oct 7 2008. It was in “bad shape” Unliveable. It was so bad I had to get a 9 month construction loan just to buy the house. I had to do a total restore and I just got a real 30 year mortgage Jan 29. I am just now moving in the house. Where I had the construction loan can I put my closing date tha last of Jan 2009???
Thanks,
Unless you built the house from the ground up (major renovations do not count) – your purchase date is the date you CLOSED – not the date you occupied. It appears you qualify for the repayable $7,500 loan.
I am in the same boat as James. Bought a house and closed on 1/30/09. I have already filed the $7500 tax credit on my 2008 taxes and gotten the refund. Can I ammend my return and get the extra $500? Will I have to pay this back over the next 15 years???? If someone knows the answer to this, PLEASE let me know!
You can ammend for the additional $500 and I’m almost entirely sure you won’t have to pay any of it back, because the credit is retroactive til 1/1/09
I am so confused. It seems like some people are filing for a first bought home even if it was before April 8th of 2008. We closed on our home on March 23rd 2008-what luck! Can we still file for anything? Do we just tell our tax guy to check a box? help!
Well Lucy – if you “fudge” the date you closed (which you would have to do on Form 5404), you would be committing tax fraud. I don’t know about you, but a measely $7,500 loan isn’t worth an audit and all the headache and attorneys’ fees you’ll be incurring (as well as penalties, interest).
well thats exactly what a couple of people i know did (see earlier post) they claimed it on houses the bought 3 years ago and indeed got the 7500.00 for it. now they are shopping and taking trips, go figure
This new 8000 credit is free money. Why does the 7500 have to be repaid when its all part of the same bill and they moved the date back to January 1st when we had a different president. Something sounds illegal here.
Kathy – It’s not all part of the same bill. The $7500 tax credit was part of the stimulus bill that was passed in 2008. The $8000 tax credit is part of the bill that was signed this week. They are totally separate things.
Well, not entirely. The current $8000 credit cuts the $7500 credit time frame in half. The $7500 was supposed to run from 4/1/08 to 7/1/09. Now the $8000 credit starts 1/1/09 and ends 12/31/09 and the $7500 ended on 12/31/08. So if you bought a house last year you have to pay it back but if you bought it this year you don’t.
I have to pay it back. =(
Would I still get the tax credit if I have a FHA loan with down payment assistance?
I don’t know about the down payment assistance but when I filed using TurboTax it only asked if I had bought a house.
This is my question as well. Does anybody know?
I searched the site some more and found this…
http://www.federalhousingtaxcredit.com/faq.php#14
So it depends on what kind of program you used. I’m 95% sure this disqualified me. Best of luck to you though!
If you have taken the $7,500.00, can a person change there mind and give it all back? Or can you payback more than the $500.00 and pay it back early.
Just file an ammended return without taking the credit. Talk to someone with experience with taxes.
Thanks Alex
I bought a house that closed Jan 16th 09. I already filed my taxes, and took advantage of the $7500.00. My question is, since my home did not close until Jan 09, and I filed my taxes before the bill was signed, do I still have to pay it back? Also will it bump up to $8000.00?
Hi everyone –
Thought you might like to know that the IRS has updated Form 5405, which applies to both the $7500 and $8000 tax credits. Reading it will answer many of the questions posted on this forum:
http://www.irs.gov/pub/irs-pdf/f5405.pdf
Can anyone tell me the answer to this question. I bought my first home from my parents…it wasnt a gift and I paid the full asking price, so do I still qualify for this credit?
Cher – unfortunately, you cannot claim the credit if you purchased from a close relative (i.e. parents) even if it was the full asking price or FMV. Sorry.
I closed on my home in July 2008 with my fiance. I sold a home last year, however she has never owned a home. We were married in September 2008 and filling jointly this year. My question is if we purchased the home in June 2008 when we were unmarried, do we qualify for the credit?
I had a similar question.
Me and my fiance were going to buy a house together in juky 08. I decided not to put my name on the home so she would be able to get the first time homebuyers loan. We got married in aug 08 and guess what. The irs says she or we cannot claim the credit.
If anyone knows anything to the contrary please let me know.
I bought a home on Jan 30, 2009.. but claimed the $7500 tax credit when i filed my taxes earlier this month before the new bill was passed.. does it change to the $8000 tax credit because I bought it after Jan 1 2009?
I’m going to closing 2/27/09 to purchase a home. I’ve owned a mobile home & paid lot rent in a mobile home park for 5 yrs. Do I qualify for the $8000 first-time homebuyer credit? I’m single and have not owned an actual house other than the mobile home for more than 5 yrs.
Abby – A Mobile home counts as a principle residence. You would not quailify unless you purchase a new home in February with someone who has not owned a home in the past 3 years. This person could not be your spouse (or family member to claim full credit) at the time of purchase.
Tim – I’m wondering about that because one of the IRS sites I looked at defines a principal residence as “condos, co-ops, townhouses, or detached single family homes”. I’m going to call my tax person tomorrow and verify. Thanks for your input.
Abby – I do not believe a owning mobile home considers you a homeowner. There is no deed of trust for a mobile home that is recorded with the courts since it’s not afixed to a foundation. I think you’ll be considered a first time buyer and qualify for the credit. But definately check with your accountant to verify. Best of luck!!
Dear Abby,
I was wondering what you found out about this issue. I am in the same boat as you. I owned a mobile home since 2002 and purchased a new home in 02/09. Thanks!
Lucinda,
Still waiting for my tax guy to call me back. I’ll post it as soon as I hear something..keeping my fingers crossed!
I am in the same boat and have the same question. I owned a mobile home in a trailer park on rented land, and when I bought my new conventional home last may I qualified for a a first time home buyer loan because my mobile home was not on a permanent foundation, so do I qualify under this federal program?
Yea, i would verify with your local tax office. You may want to check the following website out. (see below) since it specifically mentions “mobile homes”
http://www.federalhousingtaxcredit.com/2009/faq.php#2
What types of homes will qualify for the tax credit?
“Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.”
I thought I didnt qualify, but my tax office found a loophole, since I purchased my home in July 2008 when i was unmarried and got married 2 months after i bought my home.
Good luck!
TIM:
How was the loophole explained? I have a similar situation. I went into buying this home (single), qualified for everything on my own (and yes, first time homebuyer). However, I married before the end of the year.
Can you elaborate? The law seems to relate only to individuals who have been married a while.
Was your new spouse a former homeowner within the last 3 years?
Kay,
Since you were not married at the time of the purchase, you are eligible for the credit. IRC Sec. 36(a)(1)(C) would apply. The fact that you married the same tax year is irrelevant as this credit specifically is determined by your maritial status at the closing date of purchase only. See below.
http://www.irs.gov/pub/irs-drop/n-09-12.pdf
(C) Other individuals. If two or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $7,500.
Based on statutory language, I the determination of marital status for purposes of defining a first time homebuyer is made at the time of purchase.
If the statute were written any other way, it would cause all sorts of headaches.
For example, I buy a home on January 31, 2009, and on the same date, I efile my 2008 return and receive my $7,500 check from the IRS. On May 1, 2009, I get married to a homeowner. Does this mean I have to return the $7,500 check? I don’t think so
No actually I sold a Condo in Aug 2007, so I am not a FTHB. However, my wife has never owned a home, and we purchased my home together (both on the title) in June 2008, when we were engaged. We became married in August 2008 and we are filing jointly for 2008 claiming the credit.
Hope this helps you.
Tim,
Thank you for the detailed explanation and prompt reply.
I must elaborate more. I entered into a sales contract single (obviously, with the understanding I’d qualify for the credit), applied for the loan (on my own) and approved. However, we actually got married before closing on the home. All of the paperwork on deed, closing, etc. says ‘unmarried’ and I’m the only one on the deed. It all reads this way because I married waiting on closing date with ALL mortgage papers complete, etc.
Make sense? I know, this one is hairy! I SO would have waited 2 weeks if I’d been properly informed on how marriage could possibly jeopardize this credit.
Outline of Situation: I singly made an offer on a home on 9-8-08 which was accepted. I was singly was approved for the loan, submitted all mortgage requirements, again, single status on everything… as I was still single at the time. While waiting on underwriting, appraisal, etc., I married on 10/3/08. Closing was set for 10/23/03 (which is when we closed). No one ever changed the docs to represent I was married (although I told them I did get married) because I qualified totally on my own. I paid for all closing, escrow, etc. (and continue to pay all household on my own (sorry, no dependents to claim Head of Household) the deed and mortgage is in my name. Is the 20 days I was married before closing going to kick my butt?
Can you help, now? : )
Again, thanks!
I am not looking for a government handout. I am just really hurting because I went into this home purchase believing I’d receive the credit. I DIDN’T go into this home buying believing I’d marry… but I did.
Kay,
No problem. Hmmmmm well I am 99% sure what determines eligibility for this credit is the actual maritial status on the closing date. I guess now after reading your exact situation it looks like you would not qualify.
“If the individual is married, neither the individual nor his spouse may have had a present ownership interest in a principal residence during that three-year period.”
It does seem unfair, since my family was barking at me to be married before i bought my house, now it seemed to pay off!
As far as the paper work showing you were single may hide this from the IRS, however if you claimed the credit and were audited they would probably ask for you marriage certificate and compare that to date on your closing documents….then you would have to pay back $7,500 plus Interest and possibly penalties.
HELP
I am in the same situation. I have called the irs and they say no way. How do I go about doing this? I do not want free money and I do not mind paying it back.
Clint,
Were you married on the purchase date or did you get married after?
Hi…it seems some people are getting the credit on homes bought 2 and 3 years ago?! We closed March 23rd. of ‘08. Is there a specific form our tax guy fills out? I hope we can get the credit! any advice.
You have to have bought the house after 4/1/08 and before the end of ‘09 and it has to be a first time home purchase. If anybody is taking the credit on homes they bought a couple years ago, they could get into a LOT of trouble. I think you’re out off luck.
I have already filed my 2008 tax return before I knew about the tax credit. How hard is it going to be to get that money, and do i have to wait until April 15th to do so?
You will probably need to file an amended return, 1040X, to get the credit.
Hello,
I’m going to be closing escrow March 2009 to purchase a home. I qualify for the $8000 first-time homebuyer credit. Can I claim the tax credit in my 2008 taxes or do I have to wait until next year for 2009 taxes?
I understand that you can file an amended 2008 tax return to get the credit now.
We just bought our house, we were doing our taxes through turbo tax and one of the requirements on their site was that you couldnt purchase the house from a relative. All the other sites i have visited about the first time home buyers tax credit never mention that. Is that a requirement?
Yes that is correct.
http://www.irs.gov/pub/irs-pdf/f5405.pdf
Who cannot claim the credit:
8. You aquired your home from a related person.
a. Your spouse, ancestors (parents, grandparents,
etc.), or lineal descendants (children, grandchildren,
etc.).
Just spoke with my tax guy. As a homeowner of a mobile home in a mobile home park for the past 5 yrs and going to closing to buy a townhouse this Friday, I do not qualify for the $8000 first-time homebuyer credit. The mobile home is considered a “principal residence”. Even if I owned and lived in a houseboat, I would not qualify. I’m disappointed but would rather have found out now than discover at an audit 3 yrs down the road that I owe it back along with penalties, interest, etc. Thanks to all who posted comments in response to this.
I actually just got off the phone with the IRS and they also told me that a mobile home is considered a primary residence. I explained to them that I qualified for a first time home buyers loan on my new home but they say that the Federal Criteria is different than the criteria the mortgage company used. Doesnt make much sense to me, but I guess it is what it is.
My thought was that since mobile homes in parks are not affixed to permanent foundations and I did not own the land it was sitting on, perhaps there would be some sort of qualifying exception; however, that doesn’t appear to be the case. You sure can’t borrow money against a mobile home sitting in a park like you can with a stick-built house. Since you don’t own the land, the “primary residence” thing doesn’t seem to hold much weight in that scenario. Oh well.
I wanted to know is there a phone number that i can call to track and see when the check is or in route.
I was wondering the same thing….have you found anything on this?
I was divorced in August and bought MY first home in September. Is there any way that I qualify for the first time homeowner? This is MY first time to own, although my exhusband owned a home priviously where i resided with him.
K,
It depends. Was your name on the title of your ex-husbands home? If not you would be eligible, since you were legally un-mamrried when you puchased the home. If your name was on the title then you would not qualify for the credit.
Hi,
I bought my first house Dec 1, 2008 and thought i was eligible for the first time home buyers credit. My ex husband put me on the deed of his home with a quick claim with his parents with rights of survivorship in july 2006. There was never any mortgage on the house and it was owned outright (his dad bought it) anyway, we divorced in oct 08 and did a quit claim and i am no longer on the house. i didnt think that would be an issue until my accountant said no i did not qualify because i had an interest in a home within three years is this correct?? its so upsetting as me personally this is my first time buying owning. any thoughts or advice are appreciated!! thanks, inger
I bought home on Jan 2008. It seems I am not qualified for tax credit? Is there any other tax credit for first time buyer in early 2008.
Unfortuantely not. The earliest FTHB tax credit was April 9th 2008. The new $8,000 credit from Jan 1st 2009 – Dec 1st 2009. There may have been an HUD FTHB goverment grant of some-sort, but I am not certain.
Hope that helps.
after hours of wait time on the phone with the irs i did get to speak to someone on the tax law for the fthb credit and since i was on the deed and it was my primary residence i cannot take the credit. hope that helps anyone else.
FYI – You qualify for this credit, if any of you purchased a home with a fiance (umarried on closing date and purchased after April 9th 2008) and at least 1 of the 2 in the couple qualifies as a first time homebuyer, and later become married in 2008. AS long as the new home is both tax payers primary residence. The law is based on your maritial status at the time of purchase. Filing MFJ or MFS is irrelevant.
I verified this with my accountant and with the IRS.
I am closing on a new house in May ‘09. I sold my previous house in August of ‘06, but moved out of this house and in with my Fiance (who rents) in Feb ‘06.
Form 5405 defines first time home buyer as:
You (and your spouse if married) did not own any other main home during the 3-year period ending on the date of purchase.
Main home. Your main home is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence.
Publication 523 examples of main home:
Example 2.
You own a house, but you live in another house that you rent. The rented house is your main home.
When I moved out of my purchased house in Feb ‘06 – it ceased to be my main home and I think I should be eligible for the credit. Am I barking up the wrong tree?
Mike,
This is the way I see it. If you can prove to the IRS (if Audited) that you moved in with your fiance in Feb 06′ (by utility bills in your name and change of mailing address, etc.) then in the year 2006 may not be defined as your main home, since you did not live there 50% of the time.
That is only my guess, however I think the IRS will be more auditing more of the $8,000 credits than the $7,500 credits (since this is being paid back over 15 years)
This is a tough one…. The only “for sure” method would be to push closing up 3 months
So if the tax credit of $7500 at it’s full amount for a single person buying a home starts to phase out at $75000 MAGI what would the credit be for someone with $85000 MAGI? Would it be $3750, 50% of the $7500?
I found this posted by someone. I hope I may ‘repost it’. Anyone have an opinion or interpretation of this?
I did finance via FHA – assuming,yes, as a First Time Home Buyer.
It reads to me if EITHER spouse is a first time home buyer.
Thanks for any input!
Chapter 3
Miscellaneous Policies
Page 3-02
One of FHA’s highest priorities is to assist homebuyers with the purchase of their first home. FHA tracks the number of first-time buyers assisted by our programs. Consequently, it is very important that the information is entered accurately in FHA Connection.
In order to help lenders properly identify first-time homebuyers, we are clarifying the definition of what constitutes a first-time homebuyer. A first-time homebuyer is an individual who meets any one of the following criteria:
- An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers.
I am filing using turbo tax, and I qualify for the 7500 dollar tax loan. I bought this home with my girlfriend but she does not want the loan. Can I claim the full 7500 because on turbo tax it asks me how much of the home I own and if I put anything less than 100% i do not get the full 7500. What can I do?
I bought a home on Jan 30, 2009.. but claimed the $7500 tax credit when i filed my taxes earlier this month before the new bill was passed.. does it change to the $8000 tax credit because I bought it after Jan 1 2009? Do I need to file the 1040x or will the IRS automacticaly deposit the 500.00 and not have me pay it back?
What I don’t think is fair is that the original tax credit in effect was $7,500 and was from April 1, 2008 – the end of January 2009. My boyfriend bought a house and closed on September 30, 2008, making him eligible for the $7,500 tax credit (or loan) as it has to be paid back still. Now they have changed it to an $8,000 tax credit that does not have to be repaid. That is rediculous. I could see if the program was years old… but it’s less than a year and can’t include that many people!
To top it all off, his job of 13 years is being sent to China and the local plant is closing. So much for being a hardworking dedicated Amercian!
It’s just kind of a slap in the face that closing on a house 3 months prior means that he has to pay it back and everyone else does not… especially since he will be looking for a new job now that Syracuse China will be manufacturered in China… yes, I know… doesn’t that make it China China… apparently not… they will still use the Syracuse China name!
Manufactured Home on rented land can not get regular home mortgage. The manufacturesd home has a title to it. I was told that I should qualify for first time home buyer. What do you know at this date about the home credit.
Same situation – it is all very confusing. We purchased a home in ‘08 and waited to file our taxes until we could get a good answer. Since we still don’t have one, we just filed yesterday and included the $7500 credit. We are going to put it in a CD. We will be using it to show cash reserves when we refinance to put the $20,000 we have spent on home improvements into a 30 yr mortgage. That way, if they conclude we do not qualify we will be able to send it back.
What are the option to repay the $500 in 2010? Or is there none? Is the payment only from your own pocket, deducting the $500 from your tax refund, or adding $500 to your total income when tax is file?
i applied for the 7500 credit on a house i closed on feb 13 2009. the new 8000 credit doesnt have to be paid back. do i still have to pay the 7500 even though i purchased in 09? are they planning on making people who got the 7500 credit not have to pay anything back? kinda not fair to people who took the 7500 credit when the people who take 8000 dont have to pay it back.
i bought a house in a land contract do i qualified
Has anything been said about early repayment? What if I want to refinance my house in a year or two?
Two things:
1. Why are people claiming first time home buyer tax credits for home purchases that occurred in 2009 on their 2008 income tax returns? Would you claim income from 2009 on your 2008 tax return? No.
2. People keep complaining that it’s not fair they have to pay back their FTHB tax credit or didn’t get a credit at all because of when their closing date is/was. You knew the circumstances going into signing your mortgage and your timing may be unlucky but saying it’s unfair is not what it is. What’s unfair is where that tax credit comes from… redistribution of wealth. I know home buyers didn’t make the tax law and I think everyone should try to take advantage of whatever the tax law is because I certainly would if I were buying a home but the sense of entitlement people seem to have towards this tax credit and any other sort of government handout is unreal.
“A government big enough to give you everything is big enough to take everything away.”
Thanks for you comments Jessica, I guess the sense of entitlement as you refer to it comes from years of paying for all the other programs that other people take advantage on a daily basis. My boyfriend has always worked 2 if not 3 jobs from the time he was 19 and is now in his 30’s. Not asking for a hand out… or entitlement… I was merely saying that the original time frame of the program was April – July 2009… he closed 9/30/09… and now the program changed a few months later, with a new time frame of Jan – Dec 2009 and a non-payback clause. I guess the insult came when he found out his job is being moved to China… after 13 years of dedicated work on the crappiest shift. So I don’t consider it entitlement… I consider it due to him after supporting his fellow americans and people like the Octuplet mom who CHOOSE that lifestyle.
Does ownoing a mobile home quilify you as a first time home owner ?. We bought our house in the time frame of 2008 and was told since we owned a mobile home that we do not quilify for the loan … Help
Does anyone know what determined the dates from which you qualify? It sounds like they pulled it out of the sky. Im disgusted, I fell just 4 days shy of qualifying(closed April 4th) and need the money very badly. The economy was not great when I closed on my house, but im getting no breaks…it REALLY stinks!
I’m extremely upset that because I bought my home on October 22, 2008, instead of January 1st 2009, I don’t get the true tax credit. It is unfair that I have to pay back the credit, when all these other people get $8,000 and don’t have to pay a single penny back. In what way does that credit help me? I have to pay it back, it is no help at all. I should be eligable for the same tax credit when I also bought my home durring the time that we were going through economic crisis. I could truly use that credit as a first time homebuyer. My home desperately needs help, and being a graduate student, I have little if any money to put towards home repair and upkeep this first year, and I do NOT want another bill upon my shoulders for the next fifteen years! Is there anything that can be done??
I’m sorry you feel that way Jess, but if you bought the house knowing you were going to have to pay it back then I don’t buy the “I need it” excuse. You bought a house like everyone else did and no one put a gun to your head and forced you to take on the refundable $7500 tax credit as a “bill” (which it’s not; it’s a $7500 0% loan).
If you bought a house and did your homework on whether or not you could afford it then good for you. If you didn’t, then I have absolutely no sympathy for you.
So let’s assume you knew what you and your boyfriend were getting yourselves into when you bought the house. Now someone else qualifies for a hand out and you don’t. That’s your issue; not your situation.
What about all of the other people that bought at the height of the market and are now severely underwater? What should we hand them? If anyone deserves it, it’s them.
I’m not denying that it sucks (I’m in the same boat as you; getting the $7500 and not the $8k), but stop calling it another “bill” on your shoulders or just don’t take it. I’m taking the credit and I’m paying off debt and I’m going to make the government’s money work for me and then pay it back without interest, regard for inflation, and having gotten rid of the interest I was paying. Try looking at it that way.
If it still really gets to you, then call your senator/representative. Sorry for being abrasive, I don’t mean to offend but debate in a lively fashion.
I bought my home with no intention of even taking the $7500 dollars… because, I did not want another bill… however, if I was aware that two months after I bought my home, people would be handed 8000, I would have waited. I knew about the 7500, and had no interest in it. Thats why Im not taking it. I also bought my home, knowing that I COULD afford it… which is why I bought a home for 57,000 instead of something crazy like 250,00 or whatever that all these other people have bought and failed to make payments on, that we are all now suffering for. I, have done my homework. I bought a home that I knew I could make my payments on, so these people that bought at the “height” of the market, that are now suffering because they bought a home they cant afford… I have no sympathy for them, yet I am now suffering because of their poor choices.
I am a person who pays her bills on time, all the time. I am a person who doesnt overspend and charge up crdit cards. I am a person that buys only what I can afford. I am not greedy, I get what I can get, and like a good citizen, make my payments… and before I make a purchase, I make sure, I can afford it.
You are right… nobody held a gun to my head. Nobody forced me to take 7500 dollars that I have to repay, and I am NOT taking it. However, if I know that two month down the road I would have been handed 8000 dollars for buying a new home, I would have certainly waited.
You say the people who bougth at the height of the market that are underwater are the ones who need it the most… well the fact is, those that are underwater because they cant pay their bills, thats THEIR fault not mine, yet I and everybody else is siffering the consequences. I chose to buy a home for 57,000… no it’s not a mansion, but it is what I can afford. I was not greedy, I did not go and buy a home that was way over my budget. I bought what I could afford, and I continues to do so. I do not charge up credit cards. I do not make purchases that can not be paid.
I am the citizen that buys what I can afford, makes my payments ontime every month, middle class citizen, never takes more than what I need. I AM THE CITIZEN THAT SHOULD BE GIVEN A HANDOUT
The people that made purchases at the height of the market and can afford what they bought were the ones that I was suggesting should receive the hand out; not the nit wits that bought with starry eyes.
And I’m playing more devil’s advocate than anything else. It’s reassuring to know that people still purchase homes with intelligence.
And in our exchange you can find the heart of this debate, who deserves the break? You can argue that the people who do it right are the ones that deserve it because they should be rewarded (give to the “haves”). You can argue that if you don’t prop up the idiots that bought at the height and bought more than they should have that they’ll bring down the whole system.
I bought a house in August of ‘08 and I’m probably already underwater by at least 5%. My wife and I both went to college, got jobs, met each other, saved up, got married, bought a house, are on a path to being debt free and bought a modest house for our area. But anyone in my town that bought with their eyes and not their wallet have brought down the value of my house.
And if more people default and the banks can’t figure out what they have on their books they’ll lend even less. Then more people default on their mortgages and my home value goes even lower. My taxes go down which is nice, but I did everything right and if I get laid off, I’m the one paying for it. So should I get the hand out? Or should we prop up the people that are about to lose their house and continue this wretched cycle we’re in?
Bottom line is, that if you had been notified the day before you put in your offer, the guy that put in an offer the day before would be screaming up a storm. Someone has to draw a line in the sand somewhere and both you and I got stuck behind it. I’m taking it and putting it in a CD and letting it gain interest and you’re not.
I hope things work out for you and I didn’t intend to offend. Thank you for being a smart home buyer, maybe more people could take a lesson from you, we need more people like you in this country.
Good luck on your degree!
I closed on my house March 31, 2008. The price was $108,000. I meet the income qualifications,but just missed the April start date for the first tax credit of $7500. Anyone know if I’d possibly qualify for the $8000 one in this recent stimlus package. I , like most people , could use it. What ticks me off is the fact that they just picked “April” to start it ….why not open it to anyone who bought in 2008!! Who would I call?
no you do not. You only qualify if you bought your house between jan-dec 2009, for the 8000. You dont even qualify for the 7500, because you bought your home before April 4th.
I bought my house last year and was pleasantly surprised to learn of the credit/loan. I bought a house for less than $75,000, so my credit/loan was 10% of my purchase price. Since I took money out of my IRA, I expected to have a BIG tax bill, instead I was able to pay off my credit card, my state income taxes and keep the cash I had put away for taxes in the bank. I was laid off the end of January, so it worked out.
I don’t think it’s fair that I have to pay it back and someone who buys in 2009 doesn’t, but we have 2 years for our representatives in congress to figure it out and “forgive” the loans. I don’t agree with the stimulus plan on principle, but if they are going to hand over our tax money to banks that, in turn, give million dollar bonuses to the bone heads that caused the problem, I’ll take it.
I would have liked to have seen something more in the way of the interest free loan I received for down payment assistance, where a portion of the loan is forgiven the longer I live in my home. (I only pay it back if I move before I’ve lived here for five years.) It encourages people to view their homes as homes and not investment property.
I agree… but I’m unsure of what you mean when you say, “we have two years for our representatives in congress to figure it out and “forgive” the loans.” Does this mean, they are thinking of changing the 7500 to something that doesnt have to be paid back?
I am certain that there will be complaints to representatives and I think they will change the 2008 tax credit to a real credit not a credit/loan. I may be wrong and if I am I am still happy with the deal I got. It makes it easier to budget on unemployment benefits now that I don’t have debt.
With the seemingly arbitrary April 2008 date and the repayment or nonrepayment differences, sounds like a consumer class action suit in the making. I wouldn’t be surprised to see it happen.
i am a first time home buyer i got the ship program and usda rural housing assistance program do these prevent me from getting the 8,ooo tax credit my salary is within the limits? also my closing should be around 4/14/2009, i have not filed my taxes yet, what is the last date that i can claim this home purchase on my 2208 taxes?
The thing is though, the April 2008 date is not just some arbitrary date that was picked out of the sky, it is the date the bill was signed, so that is the effective date of the credit.
I am a first time home owner i purchased my home in Feb 2008,what i don’t understand if this tax credit is for first time home owners why do u have to have to qualify if u have purchased from a certain date to a certain date.It makes no differance i am still a first time home owner who purchased in 2008 and should qualitfy im sure there are other people who did the same feel the same.This tax credit is to help people out there but how does it help us.
The credit isn’t actually to help people out per se – it is to stimulate home purchases. The intention along with this concept is to bring out the people who can purchase but have yet to do so by creating a beneficial incentive. The original bill was introduced in April 2008, so that is where they began its effective date. It is not an arbitrary date as most conceive or want to claim. Anyone buying prior to that date had NO idea it was even an option. They bought because they wanted to and could. I know because I was one riding the fence and keeping up with this bill before choosing (yes, I said choosing) to buy. It actually started out as a credit to those buying foreclosed properties only. It changed during the bill phase before being singed into law…. to be a FIRST TIME HOMEBUYER CREDIT. So, many upset not even knowing how this credit started or what it was about. Again, it was intended to removed the overage of foreclosured homes, not to assist the people. I suppose it was revised the way it was signed into law to stimulate all home sales.
We had to sell our house in 2008 because of divorce. Then I bought a house on my own. Do I qualify for the credit? This is the first time I bought a house all by myself. Thank you
My parents want to help me get a house by buying the house, and selling it to me as a contract for deed. Does this disqualify me?
Hi,
can some one advice, I live in MA and will live here til December of 2009. In November of last year I bought a 1st time home in Chicago, with intentions of moving next year, I’m renting the house at the moment. My question is will I qualify for the $7500 credit if I don’t live there at the moment?
You won’t qualify because you already bought a house.
Jen…
If you did not live in the house for long enough (or at all) for it to be considered your PRIMARY RESIDENCE, YES… you should qualify. From what I have read, if audited, the IRS would look at things such as phone bills, etc. for residency. The fact you have documentation that it is now being rented should be a strong case that it is not used as your a Primary Address. However, I’m sure it is always wise to seek legal advice for confirmation… but I believe you are okay!
Again…it is FIRST TIME HOMEBUYER (or within 3 years) for PRIMARY RESIDENCE. Many people forget (when promptly saying you do not qualify) that although you did have ownership…. the home had to be considered a Primary residence
PS: I know DC had a first time ownership credit. So, as long as you didn’t receive a ‘perk’ for first time buying and agreed it was a primary residence…. I believe the above holds true.
GOOD LUCK!
i purchased a home in july 2008 first time home owner. i have already filed my taxes. i want to know if someone can direct me in the right direction of still i still get the tax credit? and how do i go about getting it.
I rent a space in a trailer park for the trailer I own. If I buy a home, will I qualify for the 2009 tax credie?
Jim,
Unfortunately you don’t. I was in the same situation. My tax advisor said the mobile home I owned but rented the lot on which it was located in a mobile home park qualified as a primary residence. Therefore, I couldn’t apply for the first time homebuyers credit. He said even if a person owned a houseboat, it was considered a primary residence and they would not qualify. Doesn’t make sense but…there you have it.
Not sure about your tax advisor, but the information I read about First-time Homebuyer specifically states alternatives such as houseboats, etc so I would not know why a trailer should not qualify. You own it. You receive a deed. Just because you rent the land that it resides on might disqualify you for property tax credits but I would definitely check it out with the local IRS office with your specific details to be sure.
Help, I am wondering. My father recently passed away. My mother is going to remove him from the deed and put my name on there instead…in case something happens to her. With my name on this deed, and the house is paid off, I will not be living there…will I still qualify for the first time homebuyer credit?
Does this mean that since I married my husband who had owned a house in college and I just bought a new house in my name and him as a cosigner, that we are not eligible to get this tax cut?
hi
why do people who bought last year have to pay back the 7500 and people who bought this year not have to pay it back,this is just another example of bad politics,they shoud pass an extension to last years credit so it does not have to be paid back,its wrong to say that this group that bought last year should have to pay it back and then turn around and tell people who buy this year that they do not,not to mention the time periods overlap each other by 6 months.please contact the government and see what they are going to do about it,i would if i knew who to contact.
dave md
I bought my in-laws house for $150,000 in december of 2008. I was pretty excited about the repayable $7500 tax credit.. until i was told i was denied the credit due to purchasing my home from a relative. I think that is pretty messed up considering that i i pay taxes just like anyone else and purchased a home for that price. Does anyone know if that rule is still in effect?
I am selling my house to someone who qualifies for the first times home credit. Can I finance the purchase? Also can I give the buyer a contract for deed instead of a mortgage and still qualify for the tax credit?
does anyone know what a “recovery rebate credit” is? i don’t. it was part of my return and affected the $7500 tax credit. can someone please respond if you know something about it?
Billy…
If I am not mistaken, the Recovery Rebate was the check sent out to most individuals last spring and summer in the amount of (for single) $300 or $600. This should not have affected your housing credit, but it may have affected your overall refund. If you did not receive this credit last year, it can still be recovered. Tax software asks if you received it. It you did, there’s no change in your refund. If you did not, however, you would see the increase (as mentioned above) in your refund.
The only other reason I can see a difference in $7,500 is if you purchased jointing a home with someone and filed separately (each would get $3,750 if you chose 50/50… and it would adjust according however you specified percentage of ownership). If you filed single you would have had to show 100% of the property was yours.
Referring to tax software again, if you used something like TurboTax, you can view details and it will show how much of the $7,500 was actually part of your return.
Hope this helps.
What if I get laid off AFTER I purchase my first home and receive the $8,000 tax credit from the IRS, (most likely it could happen in my company), Will I have to pay the $8,000 back ?
Well if you closed this year, you would get the $8,000 when you file you taxes next year (and it does not have to be paid back). It doesnt matter if you get laid off or not. It is not based on your employment, the credit is based on the purchase of your first house.
We had a loan, not a mortgage that paid for property – built built our home and moved in end of April 2008. If we claimed interest from a 1098 (i think it is) that the bank sent us will the irs think we had a mortgage and disqualify us or do we qualify for the $7500 tax credit.
Hey all my I just got married in June of 08 my wife owned a house before we got married, She sold it and we move to Arkansas were I bought a house in August of 08. Can I use the 7500 tax credit?