Who Qualifies for the $8,000 New Homebuyer Tax Credit?

By Miranda Marquit

February 20th, 2009

One of measures in the recently passed economic stimulus bill that might have an effect on individual finances is the $8,000 new homebuyer tax credit. However, there are plenty of questions raised by the provision. Over at Bible Money Matters, there is a pretty thorough treatment of who qualifies for the $8,000 new homebuyer tax credit. Here are some of the basics of qualifying:

Who qualifies as a “first-time homebuyer? This is one of the most basic of questions. In order to qualify for the purpose of this bill, you cannot have owned a home at all in the past 3 years. So if you have had a home, but you sold it 4 years ago, you can still qualify as a first-time homebuyer.
Is there an income requirement for this tax credit? Yes. In order to take this tax credit in full, you must make less that $75,000 if you are single and less than $150,000 for married couples. The phase out take place between $75,000 - $95,000 and $150,000 - $170,000.
Will I get the full $8,000? It depends on the value of the home. The tax credit says $8,000 or 10% of the home’s value — whichever is less. So if your home is valued at less than $80,000, you won’t get the credit.
Can I flip the home after taking the tax credit. The tax credit is designed for those who plan to live in their homes long term. If you do not keep the home for at least 3 years, you may have to repay the tax credit. Flipping is not allowed.
What is the timeframe for purchase in order to get this tax credit. The $8,000 tax credit applies only to homes bought between January 1, 2009 and November 30, 2009. It is not retroactive to 2008.

This should give you a general idea of whether you qualify for the $8,000 tax credit, and some of the restrictions that go along with it.

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