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First Time Homebuyer Tax Credit
First-Time Homebuyer Tax Credit Extended

***** The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers Home prices are at historical lows making it an ideal time for many first-time homebuyers to purchase homes.*****

Some Facts:

  • The home purchase must occur on/after January 1, 2009 and on/before April 30, 2010.The date used is the closing date.
  • The credit amounts to 10% of the purchase price of the home not to exceed $8,000
  • A first-time homebuyer is defined as someone who has not owned a home in the last three years
  • The income limit for single taxpayers is $125,000; for maried taxpayers filing a joint return the limit is $225,000
  • The tax credit is not a loan and does not need to be paid back.
  • If you owe $6,500 in taxes and you receive the full $8,000 homebuying tax credit, you will only owe $1,500 in taxes. If you owe nothing for taxes and are set to receive $1,500 tax refund plus you are eligible for $8,000 homebuyers tax credit, you'll receive $9,500 as your refund.

How do I apply for the tax credit?

You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). No other applications are required, and no pre-approval is necessary.

Does the credit have to be repaid?

No, the credit is not a loan. However, it needs to be paid back if you sell your home or move out before 3 years. It must be your primary residence for 3 years.

Contact Us:

For more information about the first-time homebuyer tax credit , just give us a call. We would be happy to assist you with your mortgage in the purchase of your new home! 831-625-3939

  Carmel Mortgage
29 Navajo Drive
Salinas, CA 93906
Phone (831) 275-0380
Fax (831) 536-1803

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