$8,000 First-Time Home Buyer Tax Credit
My article on the $7,500 first time home buyer tax credit has become one of the most popular on this site, with well over 200 comments. As part of this month’s economic stimulus bill, that credit is changing to an $8,000 tax credit that, unlike the first credit, will not have to be repaid. Here’s what we know:.
First of all, there is no $15,000 tax credit for new home buyers. That amount was originally part of the economic stimulus bill, but was reduced as part of spending cuts. It’s now an $8,000 credit. Next up, here’s how you qualify for this credit:
- Purchase a primary residence between January 1, 2009 and December 1, 2009 (the closing date must fall within this period)
- With some exceptions, this purchase must be the first piece of real estate you have ever purchased
- You must stay in the home for at least three years
Update: Read more about how to claim the $8,000 first-time homebuyer tax credit. You may also want to read up on whether it makes sense to buy a home in this recession.
Update #2:Given the fact that I think this $8,000 first time home buyer tax credit is one of the most important financial opportunities for young Americans today; I have expanded my coverage of the credit with a frequently asked questions section.
Ready to go house-hunting? Save time, money, and aggravation by lining up your financing first with a mortgage pre-approval. Read my post on how to get no-obligation mortgage quotes online.
Need to file your taxes? Did you know you can prepare your federal income tax return online and for FREE with TurboTax? Learn more about TurboTax Online Federal Free Edition »
Related Posts
- First-time Home Buyer Tax Credit Provides up to $7,500
- $15,000 Home Buyer Tax Credit?
- $6,500 Home Buyer Tax Credit
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Ask Money Under 30
- Can I claim the $8,000 first-time home buyer tax credit if my name was on the deed, but not the mortgage?
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Josh Says:
February 20th, 2009 at 3:54 pm
I really wish people would quit calling these types of handouts “UNFAIR”. If there was no $8000 tax credit at all, nobody would be complaining to the government that they are being treated unfairly because they aren’t getting handed free money. Someone else is getting a gift and you are not. It’s a pretty childish/selfish response to the situation to only see the negative in that and complain.
Josh! You ought to catch an @ss whoppin for this post.
Mike Says:
February 22nd, 2009 at 5:45 pm
The only problem I have with this whole thing is simple. I will take my 7500 dollars I received for buying a new home. Thank you President Bush. President Obama claimed all of Bush programs sucked and did not help anything. So he changed it for his reign. He could of changed the old policy, most of them can be changed up to a year they were put in place, but chooses not too. For that reason, I am glad I did not vote for him and will actively vote against him next time. I do not care who he is running against. So thanks for nothing Obama. It is that simple
Right on Mike!
I completely agree with you.
I am confused about the 7500 tax credit and the 8000 tax credit. Are both still applicable or has the 8000 one replaced the 7500 thereby making all home buyers from last year disqualified from this 7500 tax credit.
Thank you all for your replies. I looked at form 5405 within TurboTax after I posted my question and realized it’d be difficult to take the credit this year. We’ll take it next year and not have to worry about an audit.
Will the tax credit of $8,000.00 be proactive for the people who purchased homes in 2008, during the midst of the Mortgage Crisis? I personally feel that the people who did their part as American citizens and continued investing in America while this crisis was unfolding, should enjoy the same benefits($500 more and no having to pay it back if you live in the house for three years) of the tax credit as those who purchased in 2009.
Called IRS today for those buying in 2009 after April 15th….file an extension if you haven’t filed yet. If you have filed, then amend after you purchase. The purchase price includes down payment and closing costs.
I went to the closing on Dec. 31, 2008 and finally closed after business hours. When I contacted the bank regarding a 2008 1098 to file, I was told I would only get a 2009 1098 as my loan start was for Jan 2009 as the paperwork was not valid until the next business day which was January 2, 2009. I would love to claim the $8000 credit but is the correct. I only assume it is as I will not get a 1098 for the year 2008.
Ky even if it was dec 31st you CAN take the credit. The date available is Dec 31,08 to Dec 2009′,Dec 31st so that you are able to claim it on your 08 taxes. So your good.
I bought (signed on) a house in November of 2008. I also filed for taxes w/o getting the 7500 tax credit. How can I get this interest free loan after filing for my 08 taxes? – the amendment page that was posted earlier? Man I wish I held off a couple weeks HAH! Oh well, tis 0% loan will be great to pay off debt I have and buy my fiancee a nice laptop for her prof. school.
Thanks for the info
I am curious about the “exceptions” in your statement “With some exceptions, this purchase must be the first piece of real estate you have ever purchased”. Is this simply referring to the fact that if you haven’t owned in the previous 3 years but did before you’d qualify?
I’m a Realtor and have clients who purchased in late 08 rightfully upset over the 09 tax credit. My advise to them…Don’t take the $7500 if you don’t need it and if you do take it put it back into the property. Make smart improvements. You’ll have to pay it back so make sure it’s there to pay back. Many homeowners will find they won’t have to pay it back if they sell in the short term as it’s unlikely they will experience much appreciation. If you don’t make a profit when selling you don’t pay it back.
Turbo Tax will let you file on line March 31 with 8K tax credit. If you wish to file earlier you have to mail it.
Hi,
My dad and I just purchased our first home in feb 2009 and my name is on the deed of trust only and not on the mortgage. My dad cannot claim the tax credit due to his salary being over the income limit. Would I still qualify to receive this credit since I work and my salary is below this amount?
Unfortunately, I have to sell my home that I just purchased 6 months ago. Since I will definitly be loosing money on the house, should I amend my taxes and apply for the $7500? And since I will be loosing money do I have to pay that back?
I bought my house in August 2008 and qualified for the $7500 interest-free-loan/credit. Is this unfair since those who bought a house in 2009 get $8000 and don’t have to pay it back? NO IT IS NOT UNFAIR. I got exactly what I paid for (a house) plus the bonus of a $7500 interest-free loan. Sure I think now, “Man, if I would have waited I could get the no-repayment credit. Shucks!” But to cry foul? Unfair? Seriously, people! You aren’t entitled to ANYTHING that you weren’t expecting when you bought your home. Let’s all take a deep breath and remember that we all got what we paid for (a house) and some of us got a bonus on top of that. No more complaining… please!
Same question as Emma asked on February 25th, 2009 at 10:40 pm. Our current house that I bought in Dec 2001 and mortgage are on my name. Can my wife buy a house on her name, using our household income to qualify for a loan, and then claim credit on our joint return? We were planning on getting a new home this year and if there is a way to get 8000 credit I will not complain… and if there isn’t a way – UNFAIR UNFAIR… how come its only valid for new home buyers!?
Thank you!
So if for any circumstances your not able to buy a home but you got the $8000.00, What happens there? I know that it has to be paid back, but would it be in 2 years like everybody else?
If I just sold my mobile home in a trailer court and paid lot rent and I purchased a home 4/6/09 do I qualify for the $8000 first home buyer credit?
Awaiting response for question #67 by Yandy and question #68 by Kathy Bruss… Thanks
Something needs to be done here. Who do we need to write to or complain to? I purchased a home in 2008 and will have to pay back my credit as well. I understand that life isn’t fair, but this is ridiculous! The economy is no worse right now than it was a few months ago.
I’m 28 and just purchased my first home in November of 2008. I knew a little about the $7,500 tax credit when I bought my home, but I had heard that it needed to be repaid. It wasn’t the primary reason I went out and bought a house, but it was definitely one of the things that pushed me over the fence.
It was a pretty good time to buy a house, and I finally found something I liked after nearly a year of searching, so I jumped.
I wish I had just waited… Since buying the house, I’ve already refinanced because banks were gouging qualified buyers on rates at the time I closed, even though THEY were able to borrow money at historically low rates. So I’m out my original closing costs, in exchange for a 1% lower interest rate (which is still about 2% higher than what they are giving people who aren’t paying back their loans via mortgage adjustments). Now I find out that 6 weeks is all that separated me from having a $7,500 LOAN or $8,000 free money with no strings attached?
I waited a long time to buy my first house, and I tried to do everything the right way. I saved my money, I put 20% down, I have great credit, I bought within my means, I’ve been responsible. I’ll make the most of the $7,500 loan, but I honestly think that if they’re just going to hand people the money with no strings attached in 2009, they should ammend the original 2008 tax credit so that it works the same way.
I’m a little tired of being a responsible citizen and continually getting screwed over for it.
Man, there are a lot of complainers on here. If we should amend 2008 why not amend 2007. If we amend 2007, why not 2006. Give me a break. Now people are complaining about interest rates?
I was going to buy at the end of 2008. I held off because the writing on the wall was there to see that interest rates where going to continue to drop. Now I will get the full 8k. Oh yeah!!!!
Tom, I feel you. I totally agree 100% with you. It was not presented as a loan. Chris, shut up. If you bought your home in 2008 you would be complaining too. Quit gloating over something that is so unfair! You should pay back the $8000 OR people who bought their home in 2008 should not have to. Simple as that. We all pay taxes. I can understand about interest rates changing as they do BUT THIS is totally different and outright unfair.
Give me a break. I didn’t buy a house in 08 because I have plenty of gray matter between the ears unlike some of the complainers on here.
If I did, I would except it and I wouldn’t complain about it.
Michael… where do you draw the line?
Funny thing is that you can’t change it, so vent away. I think it is funny.
The line should be drawn when the word STIMULUS was mentioned. Draw the line there and give EVERY one who bought a home when that word was involved A BREAK.
Give the laughing hyena a break??? Now THAT is funny.
If you got the $8000.00 credit but you did not bought a house what’s gonna happend next and how the money will be repaid back to the goverment.
After finding an article listed on Yahoo.com today, my husband and I now realize that if we move out of our home before the 1st time home buyer credit has been fully repaid, we immediately will have to pay the difference! (We got the $7500, our closing was Oct 2008) We tried to do as much research before accepting this credit but I guess we didn’t do enough
We don’t plan on staying in our new home for 15 years. It was a starter home for us to get out of an apartment. Does anyone know if there’s a way to simply give it all back now and not wait the 15 years? We aren’t spending a dime of it. So much for stimulating the economy with all that money!
Just find the appropriate office that the money goe sto and send them the money back. You can probably get that form your tax agent.
My fiancee has never purchased a home before. Could I sell my current residence to her before we are married and she would qualify for the tax credit? Could I be a co-signer on her loan to purchase my house?
Rick: See form 5405 on the IRS website. It details who can or cannot claim the credit. Since she is not a relative or ancestor, I don’t see why you couldn’t sell it to her and have her claim the credit. Now the co-signer part I don’t know about. Doubtful that you could be because you already “own” the home.
We sold our home in 2008 and purchased a new home in 2009. We figured our family was expanding and we could also help the economy in the process. Guess what, because we owned a home in the past three years, we aren’t qualified for any kind of credit from Uncle Sam. Is this fair? We are responsible consumers, but yet this is how the government rewards the responsible consumers? I think they should give everyone who purchased a new home a credit if they are giving out any kind of credit because everyone who purchases a home is actually helping the economy. No? Not to mention, if you own a home for the past three years, but you rented it out during that time, you still qualify for this credit. *sigh*
I am in contract for a new construction and have not owned a home in the past three years. My usual tax return is around 5500. This year I got that PLUS 7500 for the home tax credit. The stupulation is that over the next 15 years, instead of getting 5500, i will get 5000. there is no money coming out of my pocket. If I sell the house within three years, I have to give the tax credit back from the proceeds from the sale of the home. I am not sure why everyone is so upset because technically no money is coming out of our pocket. I know some dont have to repay the tax credit, but so what! What if the government was not giving anything at all to anyone? I have to repay, but am grateful to have garnered the closing cost, money for the upgrades, plus whatever else I want to spend the money on. The payback is reasonable to me whether I have to “repay” or not.
Tonya- the problem would be that not everyone gets a significant amount on their return
Rick -
look into a gift of equity as a condition of the sale of the house. Then that becomes he down payment. Might need a prenup before you turn over everything to her but it gets you off as a co signer.
good luck
Hello, can anyone tell me whether or not my husband who is purchasing a home in his name only would qualify for the 8000 tax credit?
I own a duplex and live in it currently and also rent out half…he is not on any loans or titles for that place. He has not owned anything in the last three years either. Confused, any info would be great. Thanks
I want to know if I can quaify for the first time homebuyers money this year. I purchased a home 4 years ago and lost it due to a divorce settlement about 18 month ago. I did not take any first time homebuyer loans on it and I took a loss on the whole operation. I lost the home to my former spouse. I have seen some language on eceptions for reasons of divorce settlements. Does anyone know how that would play out? Over the past 3 years I only resided in that home for full time for one year and was living separate for a large portion of that time but the home was still in my name until she sold it last April.
Colin
I recently read in the paper that Obama had said the the tax credit could be used for closing costs or down payment. Is this true?
So I was just wondering: I usually get around $3000 back on my income tax… so when I buy a house, does that mean that I will get that PLUS the additional $8000 tax credit, which will equal around $11,000? Right? Am I right or wrong? Please let me know!! Thanks!!
I want to know if I can quaify for the first time homebuyers money this year. I purchased a home in 1997 and lost it due to a divorce settlement about 2007. I did not take any first time homebuyer loans on it and I took a loss on the whole operation. The home was sold, because of the divorce. Iseen some language on eceptions for reasons of divorce settlements. Does anyone know how that would play out? I moved out of state in 2005 and live there since then, for 3 years. I have not resided in that home since after I left. But it was still in my name until it was sold it 2007 April. Would I still be able to get the tax break, because I’m getting ready to buy a new home.
As long as you have not purchased a home within the last three years you can qualify as a first time home buyer
That is so nice of the government,I wish government in our country will offer such good things to us.
Mike says “THANK YOU PRESIDENT BUSH” what an idiot!!!! Five days before the 9/11 catastrophe Mr. BuckFush signed the P4P agreement with Canada , Mexico and the U.S. In that agreement he appropriated $400 billion to place 5 million mexican immigrants in homes by 2010. He also removed ALL regulations governing Wall st. , Banks and the Mortgage industry. It allowed Wall street to sell over 100 trillion in credit default swaps worldwide. Wall street and the Federal Reservew (Bush’s real boss’s) knew these were toxic and they were not insured and were guaranteed to explode, which they did. My Son has been trying to buy a home as a first time home buyer for 2.5 months and we have been beat out 13 times by cash buying investors. None of the banks want to modify loans or at least very damn few do because it’s easier to throw people out and then collect on their own default insurance for 70% of the money then make up the differance by selling the homes dirt cheap at an auction or a reduced price.Get over it….Obama is President and thats final!With everything that the NAZI Buckfush set in motion with the P4P agreement, the Revised Patriot act and his NSPD-51 in May of 2007 I really doubt if AMERICA as we have known it will even be around after mid 2010. So get ready WHINERS there are drastic changes coming!!!
Wolfman
Does it matter if you owned a home in different state as your primary resident and sold it less than three years ago to quailify for the 8,000 tax credit for firt time buyers?