2009 First Time Home Buyers Tax Credit

Most people are now well aware of the First Time Home Buyer Tax Credit issued in 2009. The National Association of Realtors (or NAR) released statistics indicating a consistent rise in pending sales of homes when first time buyers could claim a tax credit. In fact, NAR’s statistics showed pending home sales were up 31.8% for October, 2009, as compared with October, 2008.

Representative Jim McDermott (D) from Washington State said, “The homebuyer’s credit has helped pave the way for stabilization in the housing market…. Its extension will continue to make homeownership more affordable and bring confidence to a housing market and economy that remain fragile.” There were, however, no tax credits included in this legislation to help those millions of people who currently owned a home or had owned a home within the past five years. There was a lot of whining from people who didn’t qualify for the tax credit under the program, of course.

2010 Extended Home Buyers Tax Credit

On November 8, 2009, President Obama signed into law an extended version of the tax credit legislation as part of a larger economic stimulus package. The tax credit for qualifying home owners who chose to upgrade to a new or more expensive existing residence between November 7, 2009 and April 30, 2010 would enjoy up to $ 6,500 in tax credit. The first time home buyer benefits remained with a cap of $ 8,000.

Charles McMillan, President of the National Association of Realtors, states, “The substantial rise in home sales we’ve seen over the past few months proves that the tax credit is working and is being used by buyers who were waiting for the right opportunity to get into the market. This important incentive is helping to stabilize the housing market, stimulate the economy and create new jobs in communities all across our great nation. Extending and expanding the home buyer tax credit will enable even more families to take advantage of current low interest rates and affordable prices to invest in their future through homeownership.”

Buyer Qualification for the Tax Credit Extension

Each qualifying home buyer who has not owned their own residence, nor has their spouse owned a residence, during the three years prior to buying a qualifying home during the period beginning November 7, 2009 and ending April 30, 2010 will receive a tax credit of $ 8,000. Any qualifying homeowner who buys a home during the same tax credit period AND who has owned the home being sold or vacated as their primary residence for five consecutive years of the past eight years will qualify for up to $ 6,500 tax credit. The qualifying home must be in the binding contract phase of purchase no later than April 30, 2010 in order to qualify for the tax benefit. A copy of the HUD-1 Settlement Statement must be provided after closure of the sale; closing must occur no later than June 30, 2010. Obviously, you won’t be qualifying if you’re under 18.

Income Qualifications

Homebuyers who are not married must have income of less than $ 125,000 to qualify for the full tax credit. Married homebuyers must have combined incomes less than $ 225,000 to qualify fully. Single homebuyers that earn between $ 125,000 and $ 145,000, or married (filing jointly) couples earning between $ 225,000 and $ 245,000 also could qualify for part of the tax credit. The tax credit amount is calculated on a sliding scale so that the more money is earned over the maximum, the less tax credit is available.

Tax Credits Versus Tax Deductions

The greatest part of this tax credit program is that it offers a CREDIT as opposed to a DEDUCTION. A tax deduction means that your taxable income is reduced by a specific amount. That said, a tax credit means the credit is the tax is assessed at the end, and subtracted from what’s owed, or added to refunds due. This maximizes the benefits to those who take advantage of the 2010 Extended Home Buyers Tax Credit Program.

The first time home buyer tax credit is made available after the present Obama administration took a big leap in reviving the declining market of housing realty. This credit is part of the stimulus package approved by the federal government to resuscitate the ailing US economy. Some of the home buyers can have the $7,500 credit available for them if they are qualified in the mentioned qualifications.

So if you’re looking for a mobile home for sale you can take advantage of the credit the federal government offers to would be home buyers like you. But you must be certain that you understand all the details of the credit before you apply for it.

First time home buyer tax credit is available only if you buy a mobile home as your principal residence. This means that your mobile home will be the home where you plan to reside almost all of the time. This credit is also available to principal purchase of a condominium, town house, houseboat or a detached house as long as it is your principal residence. Accordingly, your mobile home must be in the US. Please keep in mind that it is not eligible if you buy your mobile home from your parents, or siblings.

Although mobile homes fall under the category of qualified homes for availing tax credit, there are other requirements you should take into consideration to avoid waste of your time and effort in applying the credit. Here are the following qualifications necessary for your application:

1. The tax credit is only eligible to 1st time home buyers. The rules provide that anyone will be a first-time buyer if he or she has not owned a principal residence for three after buying a house. If you owned a vacation house that is not your principal residence, you can apply for the credit. Married couples must fit to the definition. But the rules on married couples are vague because the rules did not provide if the situation occurs where only one is qualified and the other is not.

2. You must have a $75,000 modified gross income, or MAGI, on your federal tax return if you are married head of a household or single. If you’re filing a joint tax return with your wife, your MAGI must be $150,000.

3. If you have more than $75,000 MAGI and if you’re single or married head of household, you may get a partial credit subject as long as it is below $95,000. The same applies for the second category, where your joint tax return indicates a MAGI of more than $150,000 but less than $170,000. MAGI beyond the marked limits will be not qualified for a tax credit.

4. You cannot apply for a first time home buyer credit if you bought your home before April 9 2008. 2009 home buyers are likely to have the tax credit.

To further your knowledge about the first time home buyer credit that is currently being offered by the federal government, you should visit the nearest authorities in your state. You could also learn information related to this in the net. You can benefit much from this opportunity, but you must seek advice and make plans to avoid credit problems in the future.

First Time Home Buyer Tax Credit if You Buy a Mobile Home