Congress has enacted two Home Buyer Tax Credits; a 2008 version, and the new and improved 2009/2010 version. Due to the increased interest in these government programs, this month we want to explain the terms of each and their differences.
2010 Tax Credit
This is a tax credit of up to $8,000 available to qualified home buyers purchasing a principle residence on or after January 1, 2009 and before April 30, 2010. Unlike the 2008 tax credit, it does not have to be repaid.
- The tax credit is for buyers who have not owned a principal residence for at least 3 years.
- The tax credit is equal to 10% of the homes purchase price up to $8,000.
- The credit is only available for homes purchased from January 2009 through April, 2010
- The 2010 tax credit does not have to be repaid.
- Single tax payers with incomes up to $75,000 and married couples with income up to $150,000 qualify for the full tax credit. Incomes beyond that receive a prorated credit. Taxpayers making a Modified Gross Income (MAGI) over $95K (single) or $170K (married) do not qualify for any credit.
2008 Tax Credit
The qualifications for this tax credit are the same as for the 2009 credit except for the following changes:
- The maximum credit amount is $7,500.
- The credit is available only for homes purchased on or after April 9, 2008 and before January 1, 2009.
- The 2008 tax credit works like an interest-free loan and must be repaid over 15 years.
Another plan designed to help 7 to 9 million homeowners stay current on their mortgages, called the “Making Home Affordable” Program was recently introduced. This program has two parts. The first part is a loan plan to lower interest rates for home owners (with a Fannie Mae or Freddie Mac loan and a solid payment history) who cannot refinance due to a decrease in their home’s value. The second part is a loan modification plan to help at-risk homeowners avoid foreclosure by reducing their monthly payments.
If you have questions about these programs or anything related to Austin real estate, please call or email us at 512.275.9675 and firstname.lastname@example.org. Also, you can click here to visit our web site for the latest home search technology, our state-of-the-art mortgage calculator, or our automated home valuation link.