A lot of my clients have been asking about the details concerning the First Time Homebuyer's Tax Credit that is being offered by the Federal Government. There are several important things to know:
1) It's not just for true first time home buyers. The government considers a "First Time Home Buyer" to be anyone who has not owned a principal residence in any of the past three years before this purchase.
(By the way, some clients have asked... what if I just got married and my husband has owned a home? Can we sell his and take advantage of this? Sorry! You would not qualify in this case. Neither one of you could have owned in the past three years.)
2) There are income limits. If you make more than $75,000 as an individual or $150,000 as a married couple... the credit is reduced and even brought down to zero, based on your income level. Consult your CPA or financial advisor.
3) You must purchase (meaning closed and funded) prior to December 1st, 2009. You cannot claim this if you bought before January 1st or if you only have it "under contract."
The coolest thing about this tax credit is that you do not have to pay it back like in previous years. (It used to basically be an interest-free loan from Uncle Sam.) Now, it is, as they call it, a "dollar-for-dollar" credit. So, if you owed the IRS $1000 in taxes, they would return $7000. ($8000 Tax Credit - what you owed the IRS.)
You can find some great information on this at: http://www.federalhousingtaxcredit.com/2009/faq.php#1
If you are curious as to how you can save on remodels, look here:
http://energytaxcredits.blogspot.com/
And, as I mentioned above, I definitely suggest that you check with your CPA or financial advisor to see how this will best apply to you.
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