Kitsap County Home-Buyers Tax Credit: The Full Scoop :: SoundBiteBlog.com

As you may have heard, the $8000 Federal Tax Credit for 1st-Time Home Buyers has been extended.

In addition, several new key elements have been included  into this legislation.

The $8000 First Time Home Buyer Tax Credit was due to expire on November 30th. In my humble opinion, this has been one of the few bills our elected officials have created that has genuinely stimulated our economy and given much needed tax relief to those who can really use it!

Here’s the full scoop on the extension and what else has been added:

1st-Time Home Buyers Credit

Many aspects of this tax credit remain the same as before:

• First Time Home Buyers will still get a tax credit of 10% of the home purchase price, up to the maximum of $8000.

• It applies to both partners of a married couple who haven’t owned a principle residence for at least 3 years prior to the purchase.

• If you claim this tax credit, you must continue to live in the home as your principle residence for 3 consecutive years.

• This credit is a ‘dollar-for-dollar’ reduction of your income tax amount and can be refundable. For example, if you qualify for the full $8000 tax credit, but only owe $6000 in taxes, you could receive a refund for $2000 from the IRS.

• If you buy your home in 2009, claim it on your 2009 tax return. If you buy your home in 2010, you can claim this tax credit on either your 2009 or 2010 tax return.

• You don’t qualify if you purchase the home from a lineal ancestor or descendant, i.e., your parents, grandparents, children, or grandchildren.

What has changed:

• you must be under contract to purchase the home no later than May 1st, 2010, and the transaction must close no later than July 1st, 2010.

• There is now a cap amount being imposed. For purchases made after November 6th, 2009, the tax credit will not be allowed for homes costing more than $800,000.

Repeat Home Buyers Tax Credit

This is a new tax credit that is now available for the rest of us who have owned homes in the past.:

• If you’ve lived in the same house for 5 consecutive years, you qualify.

• The tax credit is 10% of the purchase price, up to a maximum of $6500.

• If you buy your home in 2009, claim it on your 2009 tax return. If you buy your home in 2010, you can claim this tax credit on either your 2009 or 2010 tax return.

• You don’t qualify if you purchase the home from a lineal ancestor or descendant, i.e., your parents, grandparents, children, or grandchildren.

• This new Repeat Buyers Tax Credit only applies to home purchases made after November 6th, 2009.

An added note for Active-Duty Military:

Active-duty military members who are serving overseas on official extended duty for at least 90 days during 2009 and the first four months of 2010 have an extra year to take advantage of these credits.

For additional information on these tax credits:

Consult with the Internal Revenue Services Home page; go to the Smart Money website; and CNN Money.com

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Rich Jacobson is a licensed real estate professional providing knowledgeable empowerment and relentless representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLife.com, ActiveRain, Crabbing in the Hood, Facebook, Twitter, or e-mail:  kitsapagent@gmail.com

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Tags: $8000 1st time home buyers tax credit, first time homebuyers, IRS, Kitsap County WA real estate, repeat buyers tax credit