Categorized | Economy

8000 Tax Credit First Time Home Buyer

This is just fresh off the grape vine. Congress is deliberating upon a package of items which would give a push to the housing market nationally. This incentive will give a major discount to the would be first time home buyers. The thing that caught my eye was that the bill, if it passes the floor of the house, would give a $8000 credit to the couple buying their first home and about $4000 to a single person if they buy a house.

The amount for the 8000 tax credit first time home buyer deal may sound small but consider that perhaps 4% of the population buys a home. That would mean 14 million buy houses. Now if you multiply that number with this tax credit break, it gives you an idea on how much money is going to be involved in this “8000 tax credit first time home buyer” deal. Not a bad sum by any means.

8000 Tax Credit First Time Home Buyer

And 4% is just hypothetical. The actual number may turn out to be even larger because of lot of population of renters is sitting on the fence looking to see which which way the housing wind blows.

For important information, Click Here > 8000 Tax Credit

According to the Initial plan for the “8000 tax credit first time home buyer” by the Obama administration, there was going to be a $15,000 tax credit for the new home owners but because of trying to make it a bipartisan effort and bring the Republican counterparts on board, the administration had to curtail it at $8000. According to the political hacks, the deal is still negotiable.

The federal tax credit program for home homers has been designed to cover qualifying home purchases between April 9, 2008 and April 1, 2009. But from what I know, there are going to be some restrictions and limitations attached. Keep an eye for those tiny asterisks which accompanies such things.

Assuming you qualify (buyers in previous year will be discounted),

1) The sum of your housing credit, and it changes every year, will be divided by two and hence into two tax returns. Therefore, two years.

2) The biggest catch will be, surprises of surprises, you may not qualify for complete credit. The parameters depend on your tax liability and how much you are really looking forward to pay to the IRS. Which implies the more you pay to the IRS, the higher tax credit you will be able to qualify for.

3) You will definitely qualify for this credit and hence claim it on your 2008 tax return.

4) Even though people are touting it as a loan, you do not have to repay this credit.

    41 Responses to “8000 Tax Credit First Time Home Buyer”

    1. Troy says:

      8000 Tax Credit First Time Home Buyer sounds like a dream come true for home owners. I am sure even those who are getting 4000 would be happy. Original bill would have given a higher pay off but this is fine as well.

    2. Andy says:

      This is a great provision. This article outlines the credit in detal but one question I have as is how is the credit applied for dual occupants where one is eligible for the credit, but the other is not?

    3. mccamman says:

      You have the politics of this all wrong. A Republican Senator in the grips of the NAR tried to put the provision in. It was reduced to its current form in the conference committee meeting between the house and the Senate.

    4. Joy says:

      This article provides updated information on the tasx credit, particularly for joint situations :

      – If you and your spouse claim the credit on a joint return, each spouse is treated as having been allowed half of the credit for purposes of repaying the credit.

      – If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount allocated cannot exceed the smaller of $7,500 ($8,000 if you purchased your home in 2009) or 10% of the purchase price. Note: A reasonable method is any method that does not allocate all or a part of the credit to a co-owner who is not eligible to claim that part of the credit (I would go with 50/50 as a reasonable method if one person is not eligible for the credit)

      • Troy says:

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    5. Khristine says:

      This 8000 tax credit is great!!We’ve bought our first home in January 2009 knowing that we were going to get the 7500 $ free interest loan which would’ve been a great help for us(this loan helped us a great deal to decide on buying the house).But the 8000 tax credit is just wonderful.We’re just waiting now for the software to get updated so we can file the tax return.I hope this will make other people get into the market and help our struggling economy get better.

    6. Sunny says:

      Just a quick question. I sold my home (closed) on April 28, 2009. I am in the line again to buy a home and want to take advantage of $8000 credit. It says that I have wait three years from the date of selling my old house to qualify. I am in the process of writing a contract to buy a new tomorrow but won’t do closing on the new home until April 30. Should I wait another month and write a purchase contract after the April 28 or it only counts when the new home was closed? Can any one help me here. thanks.


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    7. Ryo says:

      I think the time period is between Jan. 1, 2009 and Nov. 30, 2009 instead, which makes more sense because the bill just passed in Feb, so it does not make too much sense to have the deadline at April 09.

      Also, if I bought a investment property 3 years ago, do I still qualify as a first time buyer? Thanks so much!

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      • Armin says:

        this too, you could try with first premier or orarchd bank, but beware of the annual fee (around $ 48), program fees ($ 7 monthly) and other fees. Bad credit credit cards sometimes have higher interest rates too. They do disclose this information so read the fine print. And they will report to the major credit reporting agencies.

    8. Conrad F Heede says:

      Screw the republicans! You mean the tax credit COULD have been $15k, but to bring along the overly partisan republicans, we will now ONLY get $8k? Oh sure, give another tax credit to Big Oil or King Coal, or anyone making at least $1 million a year, but F*** the little guy. THAT is why I will NEVER vote republican again. It’s sad, all those years I believed them…

    9. Dan says:

      Why don’t you tell it the way it is. The republicans pushed for $15,000 tax credit and it was the democrats that didn’t want to increase it past $8000. The bipartisan push was by the republicans, who understand they need to get people into the houses so they can pay more taxes and increase the values of the homes they live around. Obama would put everyone into the projects if they had a choice.

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      • Andrew says:

        I just reserved a safe disepot box at my bank because my father advised that I get one. At the moment, I have a fireproof box in my home with all of my important documents in it. What should I transfer to the bank? What purpose does my fireproof box serve if I have a safe disepot box? What kinds of things should I keep in each one?

    10. Eric Kodner says:

      This incentive is not a “band-aid”. It is literally keeping the real estate economy alive. It is creating liquidity in housing for seniors, people who are divorcing and first-time buyers. I’m a real estate broker and we have been processing these transactions weekly. These buyers are the one bright spot in an otherwise lackluster real estate market.

      The credit is also having a huge positive impact on reducing unsold housing inventories in areas where the inventory vastly exceeds the ability of the market to absorb it. Buyers are receiving multiple benefits, including the ability to purchase foreclosures at super prices and then to receive the $8000 credit on top of that, which they may use for rehab or as a “cash cushion” as they make payments.

      The incentive does invest in people. It provides them with up to 10% of their downpayment. I have clients who literally would not be able to buy without this provision.

      I’m sorry to read so much misleading and inaccurate information from “tea party” fanatics and people who simply despise the Stimulus package. I’d strongly encourage prospective buyers who are seriously interested to look into this issue further, and they should not be swayed by political hype from either end of the political spectrum.

    11. Brin says:

      Am completely new to even thinking about purchasing a home, but heard about a tax credit- heard a few different things- is there a difference between the 7500 no interest loan and the 8000 tax credit, and is it a credit against taxes owed, or is it a rebate? Does it work on a condo? Thanks for the help.

    12. Carmen Arruda says:

      Check out this story about the extension of the housing tax credit:

      If you want to skip it, here’s the interesting part (which they do not explain in detail):

      1,400,000 homebuyers have taken advantage of the tax credit.

      The story specifically states that NAR estimates that 350,000 of those wouldn’t have purchased without the tax credit, meaning 1,050,000 would still have purchased without the tax credit.

      This means the total cost of the program breaks down like this:

      1,400,000 x 8,000 = $11,200,000,000 (11.2 BILLION)

      This means the total cost to give the 350,000 people who wouldn’t have purchased a home without the tax credit was the 11.2 Billion; which means:

      11,200,000,000 / 350,000 = $32,000 per transaction


      It cost $32,000 for each individual who got the $8,000 tax credit, to motivate them to purchase a new home.

      Carmen Arruda

    13. Kay says:

      What happens if they tell you no after you buy a house

    14. Scott L. says:

      BE WARNED! Allow 12 months to receive this credit after you file! The IRS is extremely behind on getting these refunds out the door!

      5 months and still waiting!

    15. Stephanie Baker says:

      Carmen Arruda’s data is very correct. I do believe they will extend the tax credits however. What choice do they have? They are running this economy in the ground.

      • Holly Jones says:

        Stephanie you are right, they are running it in the ground.
        I do like Carmen Arruda’s data. Reporting the facts and in detail.
        Keep it coming.

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    28. Norm says:

      The problem with getitng a loan with bad credit is that you’ve already shown you cannot repay the loan. There is a difference between wants and needs and usually those with bad credit have gotten into problems by having too many wants. Think about all of the bad money mistakes you’ve made. We’ve all done it that dinner out or that pair of jeans on sale. One transaction at a time has caused us to go over our credit limits and just one setback caused a late payment. Before you know it, you are taking loans to repay loans. The lenders know your personality type based on your credit score. What makes you or them think otherwise about your future if your past shows impulse? I don’t blame you for not wanting a cash advance but those are the kinds of companies willing to take risks because they charge such high interest. Your best bet is to increase income and/or reduce expenses. Do you NEED a loan or simply want one to bail out of mistakes you’ve already made? Think about a part time job, getitng rid of some services you really don’t need, and developing and sticking to a financial plan that will give you the power to be a lender instead of a borrower. Don’t compound your bad credit with bad choices.

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