If you plan to use the First-Time Home Buyer Tax Credit program, time is running out. The program expires November 30, 2009 and closing on a home can take up to 60 days.
That leaves you 6 weeks from today to find a home and go under contract.
The First-Time Homebuyer Tax Credit program was passed as part of the 2009 economic stimulus plan. It credits up to $8,000 in tax payments to qualified buyers.
The qualification criteria are as follows:
- Buyer may not have owned a “main home” in the past 36 months
- The home may not be purchased from a parent, spouse, or child
- Adjusted gross income for the household must be below $95,000 for single tax filers and $170,000 for joint tax filers
Furthermore, not everyone who’s qualified will get the full $8,000. The credit can’t exceed 10 percent of a home’s purchase price, for example, and households with income approaching program limits get lesser benefits, too.
Meanwhile, an interesting note about the First-Time Home Buyer Tax Credit is that it’s a true tax credit and not a deduction.  . A person or couple claiming the $8,000 credit whose “normal” tax liability is $5,000 would get back $5,000 or whatever had been withheld for federal income taxes plus an additional $3,000 from the US Treasury when their tax return is processed by the IRS.
Review the program’s criteria at your leisure, but don’t wait until October to start looking for homes. If you can’t close by November 30, 2009 for any reason whatsoever, you won’t qualify for the tax credit.
Better to be ahead of the deadline than chasing it.