The Worker, Homeownership, and Business Assistance Act of 2009 was an attempt to motivate the moribund market, and offers new home buyers a tax credit. This credit is generally around ten percent of the cost, up to a total of $8,000.
A new home buyer or first time home buyer is defined as a buyer who does not own a principal residence for three years before this particular purchase. For married taxpayers, both the buyer and the spouse's home ownership history will be checked.
Taxpayers' dependents and those younger than 18 years of age are not eligible for the tax credit program. Also, the tax credit is applicable only to homes not more than $800,000, and will be paid back if the property is sold or once it is no longer the buyer's principal home within three years after it was acquired.
Income limits of $75,000 for individual taxpayers and $150,000 for married or joint filers are eligible for the refundable tax credit if the primary residence was purchased between 01 January 2009 and 06 November 2009. Tax credit also applies to those with income not exceeding $125,000 for single taxpayers and $225,000 for married couples if the home was purchased between 06 November 2009 and 30 April 2010.
There are some forms to be completed and documentation needed to claim the tax credit. Buyers should complete the IRS Form 5405 and attach to this form a copy of the HUD-1 settlement form.
Where the HUD-1 is not applicable, a copy of the certificate of occupancy can be used in its place. For homes purchased in 2010, buyers can choose to claim refund on either the 2009 or 2010 tax return.
In order to be eligible for the tax credit, the transaction should have taken place between 01 January 2009 and 30 April 2010. If the binding deed of sale was signed by 30 April 2010, it must be consummated on or before 30 June 2010.
Proposals have been made recently for an extension of the deadline to be moved to 30 September 2010. Various real estate groups have claimed the new tax credit scheme has resulted in a major rush of real property purchases, which led to a huge backlog of sales completion.
A new home buyer or first time home buyer is defined as a buyer who does not own a principal residence for three years before this particular purchase. For married taxpayers, both the buyer and the spouse's home ownership history will be checked.
Taxpayers' dependents and those younger than 18 years of age are not eligible for the tax credit program. Also, the tax credit is applicable only to homes not more than $800,000, and will be paid back if the property is sold or once it is no longer the buyer's principal home within three years after it was acquired.
Income limits of $75,000 for individual taxpayers and $150,000 for married or joint filers are eligible for the refundable tax credit if the primary residence was purchased between 01 January 2009 and 06 November 2009. Tax credit also applies to those with income not exceeding $125,000 for single taxpayers and $225,000 for married couples if the home was purchased between 06 November 2009 and 30 April 2010.
There are some forms to be completed and documentation needed to claim the tax credit. Buyers should complete the IRS Form 5405 and attach to this form a copy of the HUD-1 settlement form.
Where the HUD-1 is not applicable, a copy of the certificate of occupancy can be used in its place. For homes purchased in 2010, buyers can choose to claim refund on either the 2009 or 2010 tax return.
In order to be eligible for the tax credit, the transaction should have taken place between 01 January 2009 and 30 April 2010. If the binding deed of sale was signed by 30 April 2010, it must be consummated on or before 30 June 2010.
Proposals have been made recently for an extension of the deadline to be moved to 30 September 2010. Various real estate groups have claimed the new tax credit scheme has resulted in a major rush of real property purchases, which led to a huge backlog of sales completion.
About the Author:
This author has been contributing articles about taxes for the previous three years. In addition, this individual is fond of providing knowledge about New York neighborhood subjects, like Midtown condos along with Sutton Place real estate.