Stimulus Plan FAQs for Home Buyers
Stimulus Plan FAQs for Home Buyers 
6 Important Facts About The New $8,000 Home Buyer Tax Credit
President Obama signed the new economic stimulus plan on February 17, 2009. The plan includes the best financial incentive for home buyers in more than 30 years.
If you’re thinking about buying a home this year or any time during next few years, here are six important facts you should know about the $8,000 Home Buyer Tax Credit.
Fact One
You can get a check in the mail for up to $8,000
Fact Two
You can buy a home this year and get your check within weeks
Fact Three
You can spend the money any way you want and don’t have to pay it back
Fact Four
You don’t have to be a first time home buyer
Fact Five
How much you receive depends on your income and the price of your new home
Fact Six
You could miss the deadline even if you know the deadline date
Fact One - You can get a check in the mail for up to $8,000
Yes. You can actually get a check in the mail for up to $8,000. The term “tax credit” often leads people to think they won’t ever see any real money. It is only called a tax credit because the money is first used to pay any income taxes you owe. If you don’t owe any income taxes or if you are expecting a tax refund check, you can receive the full $8,000. If you owe taxes, the money will be used to pay your taxes and you can still receive a check for the remaining amount.
Fact Two - You can buy a home this year and get your check within weeks
You can buy a home any time from January 1, 2009 through November 30, 2009 and get the money without having to wait until you file your tax return in 2010. If you haven’t filed your tax return yet this year, you (or your tax people) simply need to include one extra form with your tax return to receive the money with your tax refund check. If you have filed your tax return, you (or your tax people) can send in a simple tax return amendment form and you’ll receive a check as soon as your form is processed.
Fact Three - You can spend the money any way you want and don’t have to pay it back
This is real money. You can deposit or cash your check and do whatever you want with it. Some people are putting it in a safe savings account just in case they need it. Others are paying off credit cards, buying furniture or going on a well deserved vacation. You can do anything you want with the money.
This is not a loan. You do not need to repay the money. What’s the catch? Simply own and live in the home for at least three years. If you do that, the money is yours. The good news is that the bad news isn’t really bad at all. If you need to sell your home during the first three years, the profit from the home sale is used to pay back as much of the $8,000 as possible. Any amount remaining is forgiven and you won’t ever have to repay it.
Fact Four - You don’t have to be a first time home buyer
This program is sometimes referred to as the $8,000 First Time Home Buyer Tax Credit. That description implies it is only for people who have never owned a home before. The truth is they define “first time home buyer” as anyone who has not owned a principal residence during the previous three years. Principle residence just means it’s the home you call home and actually live in; not a vacation home, investment property or anything like that. So even if you’ve owned a dozen homes in the past, it’s only the previous three years that really matter.
Fact Five - How much you receive depends on your income and the price of your new home
You can qualify for the full $8,000 if you make up to $75,000 as a single taxpayer or up to $150,000 as married taxpayers who file a joint tax return. You can still qualify for a portion of the $8,000 even if you make up to $20,000 more. You can expect to receive about $400 less for each $1,000 more you make over the $75,000 or $150,000 amounts. That math can get confusing so ask your tax people to do the numbers for you.
You can receive 10% of the home’s purchase price up to a maximum of $8,000. This just means that if the price is $80,000 or more, you can receive the full $8,000.
Fact Six - You could miss the deadline even if you know the deadline date
You know you need to buy your home by November 30, 2009. However, the catch is that you need to “close” on or before that date. The closing date is the day you sign all of the final paperwork, mortgage documents, receive the keys and take possession of your new home. This is not the same as the day you sign a purchase agreement or put in an offer.
Buying a new condo or house from a builder could take two months to a year once you sign a purchase agreement until the day you “close” depending upon construction time. It could also take weeks to months if you buy a resale home. This means you should start looking for your new home within the next month or two so you don’t miss the deadline.
More Information
Call Lori Duffy with Lifestyle Communities at 614-918-2035 for information about the new $8,000 Home Buyer Tax Credit, buying a condo or renting an apartment.
Renter Benefits
If you would rather rent for awhile, you can still benefit from our Bank It! program. Bank It! provides our renters with a credit of up to 10% of their monthly rent payments that can be applied toward the purchase of a new home with the help of Lifestyle Real Estate Services.
Legal Stuff
Lifestyle Communities is providing this information for general guidance only. The information on does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
