The $8,000 Tax Credit Made Easy

Posted by Judy Orr on Saturday, March 7th, 2009 at 11:26am.

Update:  Please read my latest post about The First Time Home Buyer Credit being extended as it contains some updates to this post. 

A possible short sale homeowner will be listing her Orland Park home for sale with me soon.  She is hoping that we will be able to sell it witho$8,000 tax credit towards orland park home for saleut having to do a short sale but I am not optimistic about it (she needs more than the home is worth based on comparables and the home is located on a busy street, bringing it's market value down even further).  She mentioned that the $8,000 tax credit will not really benefit her because her home is out of most first-time buyer's affordability, needs and wants.

I told her that she might not get a first-time buyer for her home, but this credit will help her because a first-time buyer will purchase the property of her move-up buyers.  So it's all a domino effect.  This tax credit will help both first-time buyers, first-time home sellers and move-up buyers and sellers.

Here are the easy-to-understand criteria for the $8,000 First-time Buyer Credit

  1. A first-time buyer cannot have owned a home within the past 3 years.  In the case of a couple, neither one could have owned a property in the past 3 years.
  2. The home must be your primary residence.
  3. The amount of the credit is up to $8,000 or 10% of the purchase price.  Although most properties in the southwest Chicago suburbs would cost $80,000 or more, with the amount of foreclosures and short sales, there are certainly properties under $80,000.  However, most of those properties need more work than the average first-time buyer would care to deal with, so most buyers in the area should qualify for the full $8,000 credit.
  4. You do not have to pay the credit back unless you move before 3 years.  Remember, real estate should be considered a long-term investment.
  5. There is an income cut-off:  individual buyers cannot earn more than $75,000 modified adjusted gross income, couples/joint purchasers cannot earn more than $150,000 modified adjusted gross income.
  6. This is for a property purchased from January 1st, 2009 through December 1st, 2009.
  7. This is a credit taken from any taxes owed.  If you don't owe any taxes or are getting a refund, the $8,000 would be paid to you.
  8. You can wait until you file your 2009 taxes to get the credit or you can amend your 2008 taxes - speak with your tax preparer if you have questions on the best time to file for this credit.

Now is a great time to buy if you're a first-time buyer!

Imagine, I sell to first-time buyers every single year.  None of my first-time buyers last year or before had this exact same chance.  Never before have buyers had such an opportunity as this!  I wish I was a first-time buyer right now!

Think about it:

  • up to an $8,000 tax credit (most likely in our area)
  • low interest rates (these might not stay low for much longer)
  • low prices (again, we don't know when prices will start going up)

If you want an experienced agent to help you with your first home purchase give Judy Orr a call at 708-536-8200 or contact me.  I have made lifetime clients of my first-time buyers because I help educate them and never push them to do anything they're not comfortable with.

Don't miss your dream home - get all and new listings in your price range sent directly to your e-mail - fill out the Home Buyers Form now.

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