$8000.00 Tax Deduction for First Time Home Buyers

I was a little disappointed to hear the $15,000.00 got axed in the Stimulus Package, but at least the $8000.00 does not have to be paid back.

If you are a first time home buyer, now would be a good time to consider buying your first home.

  • Prices have never been lower in Ann Arbor and throughout Washtenaw County
  • The interest rates are low hanging around 5%
  • You get to deduct the 8000.00 to purchase your new home.

Here is a quick guide to how you can apply the tax credit and how it compares to the $7500.00 credit in 2008.

You can click here to search the Ann Arbor Area MLS.

picture-11

window.fbAsyncInit = function() {
FB.init({appId: “258847270794016″, status: true, cookie: true,
xfbml: true});
};
(function() {
var e = document.createElement(“script”); e.async = true;
e.src = document.location.protocol +
“//connect.facebook.net/en_US/all.js”;
document.getElementById(“fb-root”).appendChild(e);
}());

window.fbAsyncInit = function() {
FB.init({appId: “258847270794016″, status: true, cookie: true,
xfbml: true});
};
(function() {
var e = document.createElement(“script”); e.async = true;
e.src = document.location.protocol +
“//connect.facebook.net/en_US/all.js”;
document.getElementById(“fb-root”).appendChild(e);
}());

window.fbAsyncInit = function() {
FB.init({appId: “258847270794016”, status: true, cookie: true,
xfbml: true});
};
(function() {
var e = document.createElement(“script”); e.async = true;
e.src = document.location.protocol +
“//connect.facebook.net/en_US/all.js”;
document.getElementById(“fb-root”).appendChild(e);
}());

Comments

comments

109 thoughts on “$8000.00 Tax Deduction for First Time Home Buyers

  1. Please tell me why this is for first time buyers only??? I’ve heard nothing but “we are all in this together, it’s the American tax payer that will get us out of this problem” yet because I have owned a home before I am discriminated against for this tax incentive. Does that mean that my taxs and my childrens taxes are going to be less because I am not eligable for said tax??? Please let me know what you think

  2. don’t quite understand how the 8000 work for first time buyers. is it a credit on income taxes? or what.

    thank you
    rose hill

  3. Terry, I wish it was for everyone. The Senate Bill was for everyone but it got changed before the bill was passed.

    If you have children or grandchildren who buy a home before December 1st this year they will qualify to take up to 8000.00 of their taxes due when they file next year.

  4. Rose, It is a tax credit. They can deduct it from any taxes due at the end of 2009 reducing their tax liability for this year.

    Please call me if you would like to discuss this and I can explain in detail how it works for you.

  5. This is so UNFAIR. My husband and I are 34 years old. We’ve done some very hard saving since our early 20’s we were both about to buy when the bubble began,, we both decided to wait, because we noticed everyone was being approved to buy a home, and prices were ridiculous. Last
    April we were pregnant, and getting married, so we definatley need to find a home together. It’s not fair it’s only for first time homebuyers, people like us, who just bought were not able to take advantage of any home grant. It was our first home. Maybe we would take advantage of it, if it was for everyone, in the short time we bought our house, our house as already depreciated 5,000, and no grant. My average income was around 28,000,, hard to believe there was nothing for us.

    Seriously depressed,
    Olathe, KS

  6. I do believe that everyone should have recieve some funds, but there is none. As for the 8,000 is exactly what the 7,500 should have been. We should not have to pay back any of the money. Many people were told to file for the 7500 and get the 500 later, but when they went to file the were given 8000 more dollars. Can’t believe that, people are going to hear it from irs soon or later. We all need the money, and we all should get it. Those who got an extra 8,000 need to beaware, my husband and I bought a house in 2009, and didn’t take the 7500 plus 500 later. We knew there would be some kind of mix up, and sure enough it was.

  7. Can the buyer amend their taxes for 2008 to get a refund now (2009). Is there a deadline for doing an amended return in 2009 on their 2008 taxes?

    Thanks

    Greg

  8. Greg, yes you can do an amended tax form for you 08 taxes. It can be filed anytime. But, check with your tax preparer to make sure there is no deadline. It is 1040X form.

    Remember it is 10% of the purchase price or up to 8000.00.

  9. would a purchase from a family member on a land contract qualify ? I would like to finance the home for sale, but not sure I would be approved by a bank.

  10. Gary, the home can not be purchased from a family member but check with an accountant to make sure, this is per my lender and a Title Company. Land Contracts do count but not from a family member.

  11. I am so disappointed. We are first time home buyers and were told when this started we could use the credit for our down payment–come to find we can not, we have to have 3.5 down but if we bought in the neighboring state the credit could be used for the down payment.
    We can afford the house and the monthly payment but saving for a down payment in todays economy is rough.

  12. Hi Missy,
    Where can I find the documentation that land contracts qualify for this tax credit to first time homebuyers?
    I am writing one up for my clients and I’d like to have
    a “hard copy” for them.
    Thanks in advance

    1. Not sure. But Google it. I was told it qualified from my lender and from a Title Company. I can call on Monday and find out if you can’t find it by then. Sorry

  13. we have put money down on a house and are in escrow the house is not built yet so funding has not taken place i have taken the credit, now i want to get married she has owned a home in the last three years and does not qualify for the credit how long do we have to wait to get married

  14. I’ve been searching high and low about the tax credit and land contracts. We just moved in to a small house on an acre of land with a land contract. Since the title will not transfer until we’ve made our final payment in 4 years, I’m not sure how we could qualify. We’re only 23 and 24, and we have a young son and another due in August. We’ve tried SO HARD to scrimp and save but now my husband is the only one working. We had to search for almost a year before we were able to find this place, because no one was willing to finance us. If you find out anything about Land Contracts and the 2009 tax credit, we’d really appreciate the info.
    Thanks

  15. Moses, the way I read it is you need the buy the home BEFORE getting married. If you are married you are grandfathered in to her prior ownership. So you buy the home, claim the credit then get married.

    Funky I know…

    I am not an attorney so I advice you to seek the advice of a real estate attorney.

  16. If I were to buy a house on land contract from my father-in-law in my name only, could I claim the credit if I filed my taxes for 2009 next year as married but separately from my husband? From the IRS website, it mentions the exemption is direct blood relatives and doesn’t mention anything about in-laws. Any idea on this one?

  17. What if I owe the government for back taxes that I have not been able to pay due to hardships. I am on SS disability. Would I still get the refund if I owe back taxes??

  18. This is a great site, I’d be interested in trading links if you would be. I have a similar blog in this niche.

  19. hey missy.

    i closed on a house with my wife at the end of May. We purchased the house from my wifes grandfather. Are we eligible for the tax credit? The home was purchased in my name alone, my wife is not listed on the title work or loan information. For 2008 tax year we filed Married Filing Jointly. Will we need to wait until the ’09 tax season to file Married Filing Seperate to get this?

    Thank you,
    Anthony

  20. Anthony, if you have not owned a home in 3 years (you or your wife) then you should be good and can file an ammended return.

    If either of you have, my understanding is you would not qualify. There is talk that this will be extended to not only first time home-buyers in 09 but anyone who purchases. However, it is not passed yet.

  21. Well I purchased a home the end of April. I have yet to see the return. I filed the first week of May and was told it would be no more than 2 weeks til I had the money in my bank. This is now July 7th.
    I hope me being on disability does not make me uneligable. Does anyone know if that counts against you when you are disabled?

  22. Well I purchased a home the end of April. I have yet to see the return. I filed the first week of May and was told it would be no more than 2 weeks til I had the money in my bank. This is now July 7th.
    I hope me being on disability does not make me uneligable. Does anyone know if that counts against you when you are disabled?

  23. Azlynnes, you being disabled should have nothing to do with it. You being a first time homebuyer and not owning a home are the two main requirements. It takes time for the gov’t to respond.

  24. I Have A Question About This $8,000 Tax Deduction For First Time Home Buyers, I Just Purchased A Used Home This Year From A Friend I Work With…How Do I Know If I’m Able To Get The $8,000 Tax Deduction Being Its A Used Home And I Purchased It Through A Friend Instead Of A Real Estate Company? Anyone That Has Any Helpful Information, I Appreciate It!

    1. Melissa, it is a tax credit. When you file your 09 taxes just take it to the one who does your taxes. You can also file an amended tax return for 2008 and receive the credit now. You can get that form at the post office.

  25. MY DAUGHTER, 1ST TIME BUYER, CLOSED ON A CONDO ON JUNE 30TH SENT HER AMENDED RETURN ON JULY 5TH….THEY SENT HER REGULAR REFUND DUE HER, BUT SAID THE $8000.00 WAS UNDER REVIEW WITH NO EXPLANATION….WHY WOULD THIS BE?

  26. I just want to be sure. I never purchase any house before and still staying with my mom. And last year when my mom refinance her house she put my name in the title of the house but she is the only one who made the payment. Do I still qualify as a “first time home buyer” and claim the tax credit if I decide want to puchase a house this year?

  27. My girlfriend is buying a home, but does not qualify for the tax credit. Can I qualify if my name is on the title?
    (I do not make to much money)

  28. Cassietan, I would ask an attorney. My gut feeling is if you are NOT on the loan you would qualify.

    Matt, you can claim if you are not married. If you spouse has bought in the last 3 years then no.

  29. hello missy caulk,
    i was wondering if you could send me a copy of the document stating land contracts do count for the first time home buyers credit. back in may you offered to do this for a few others, i hope you could extend the courtisey to me as well. ive been looking and i can find it any where.
    thanks,
    jake

  30. this is 10% of the home price correct? so if the home is 120,000 you would be eligible for a credit of 1200.00?

  31. I don’t see why everyone is ao upset complaining why can’t I get it, if you read the 7th bullet ‘REPAYMENT’ no one is getting anything free, when you do the math you are paying almost 7500.00 back so how is the a stimulus all it does is create more debt!!!!!!!!!!!! duh!

  32. My wife and I were wondering….if 3 years ago, we received our town-home from our in-laws for $1.00, does that exclude us from this $8000.00 tax credit? We technically bought it from them but is there some loop hole that can work to our advantage?

  33. I and my fiancee want to buy a house. I do not qualify but she does. Do I need to enter into a mortgage with her, my credit being better? Or can I just put her on the title? Ultimately what constitutes “ownership” , the title or the mortgage? What about cash buyers who dont have a mortgage.

    1. You are an owner when your name is on the deed and title. If you have owned a home for the past 3 years you do not qualify. I would call an attorney or the IRS to confirm. However, the bottom line is you can not have owned a home for the past 3 years, is that why you said you don’t qualify? If so she needs it to only be in her name.

  34. In 2006, we entered into a land contract and are now obtaining a mortgage. Are we eligible for the tax credit, since we’ve never had a mortgage or will it be considered a refinance?

    1. Jill, if you are in Michigan you are considered a home owner with all the legal obligations. So I don’t think you would qualify now that you are converting into a mortgage. However, that being said…you should seek legal advice. The law is very clear on you can’t have owned a home in the last 3 years, the credit was set up for First Time Home Buyers.

      If you live in another state other than Michigan it depends on their laws and statutes about ownership on land land contracts.

      You can also contact the IRS to ask their opinion on the land contract ruling.

  35. My wife owned a condo. She sold it 2 years ago, however, the prior year she began using it as a rental property. Since this was not primary residence, does this qualify as first time home buyer?

  36. I purchased what I thought was going to be a vacation (second home) in Az in June but was told by my doctor to move to Az due to cronic sinus infection. I rented my home in GA and moved to AZ. Do I qualify for the tax break?

  37. I purchased a condo 2 years ago and just got married this past year – can I transfer the house to my wife in order to get the credit? If so, would I have to have solely her name on the deed?

  38. If a first time buyer who qualifies for the tax credit does not owe money for his 2009 taxes and received a refund. What happens to the $8,000.00 tax credit?

  39. I am wondering about the 8,000.00 tax credit for my fiance’s son. I am co-signing on a mortgage loan because
    he is self employed. I am getting mixed responses about the tax credit. This is his home and he will occupy it. I
    have a home of my own. Any advice will help.

    1. Howard, I am not an attorney and would not feel comfortable giving legal advice. My question is who is going to be on the deed, both of you or just your fiance’s son? I would think if he is responsible for the home, occupying it and paying the taxes, he would be allowed to deduct it. The IRS is very helpful on specific questions like this.

  40. I purchased a home in late September but did not qualify for the $8,000 due to the income limits. As of Nov. 6th the income limits have changed and I now qualify. I know that the new limits are for Nov. 6th and beyond, but what I am looking for is a loophole. Can I refinance and add my fiancé to the mortgage and title so he could get the credit? (He meets all qualifications)

  41. Hi Missy, Im a 100% disabled veteren recieving compensation and social security. I close on my first home next week but no one can give me a definate answer as to whether I will recieve this credit or not. If so, how will it benefit me? Will I recieve 8k as a check or am I just out of luck since I dont have earned income?

    If you have not owned a home in 3 years then yes to the 8000.00. If you have then you can claim the up to 6500.00 credit as a buyer. How you get your income should not matter, as this is a tax credit. If you claim it on your 09 taxes and don’t owe money to the IRS, you will get it as a check. If you do owe, then you can deduct it from what you owe. http://www.federalhousingtaxcredit.com/faq1.php

  42. Hi Missy. I am in the process of purchasing a home, and should close by the end of the year (2009). I qualify for the first time home buyer tax credit of $8000.00. However, my question is this: I have heard a lot of talk about the long delays in receiving checks for the credit. I am debating whether to file my 2009 tax return without claiming the credit so I can get my “regular” refund in a timely manner, and then filing a 1040X with the 5405 and supporting docs for the housing credit. I normally get a rather large refund, and I don’t want to delay receipt of that money too. Do you think this will be an issue, or that I would be better off filing all at one time (are 1st filings given more priority than amended returns)? Would filing all at once actually speed up my housing refund? I have been given differing advice from the tax professionals I have spoken with and am trying to decide how to proceed come February 2010….Thanks in advance for you help!

    1. Amy, if you are waiting until you file you 2009 taxes, it will just be a credit on your regular tax return. So it should not be delayed, just include your HUD statement that your receive at closing in with your return. However, you can also just file the 5405 later. I know they are taking a lot of time in sending checks but I assume that is people ammending their returns

  43. I have my house title and mortgage in my name. If I transfer the title of the house to my fiance, will he be able to take advantage of the new home buyer credit since he’s never owned any property ever?

  44. Is there any way around not getting the tax credit when purchasing from a family member? I would like to buy my grandmothers home that has just gone on the market. How is this fair that someone else can buy this house and get the credit outside the family and not me? We have been approved for a loan, but now we don’t know if we can afford the house without the 8,000 off in taxes. Can we get around this or do we just have to buy it without the credit?

  45. Hello. I recently sold my home on land contract. They are moving out and Im moving back in. Would I qualify for the tax credit?
    I’m confused…..you sold…but are moving back in?
    Can you clarify?
    If you bought you can claim the credit. If you sold and bought again a new home you can claim the 6500 credit if you meet all the guidelines. Did you live there 3 years as your primary residence?

  46. yes I was there for 3 yrs. I sold on land contract. Now you can people that buy on land contract can claim the credit. So, they are moving and I am getting it back.

  47. Banessa, no you can not claim it nor can they. They did not go forward with the land contract, the title never passed to them.
    They are moving and you are moving back in, so you are only recovering from a defaulted land contract your own home.

  48. When my husband and I began looking for a home, we decedied to not use a real estate agagent, however we did ask alot of question to a variety of agents and in our process we did tell them that we would be purchasing our home from my brother in law, and not one mentioned that we would not qualify for the tax credit. While working with a mortgague lender at a bank for 2 1/2 months, not a single person mentioned not qualify due to purchasing from a family member who has not lived in the home for over 4 years, We paid full market value of the home, nothing funny about it. Is there any way of appealing this? It’s misleading the qualifications. Please advise .

  49. Missy-
    Great site! I was recently married last May. My wife has owned her home for 4 years. I have never owned a home. If we sell our current home…and purchase a new house in just my name before the deadline, would I qualify for a first time home buyer credit. Her name would not be on the mortgage, just mine.

    Thanks!

  50. Hi Missy, This is a bit complicated. My ex-wife and I are divorced for almost 2 years now. We moved from ohio to mich april 07 (still owned a house which was on the market but NOT our primary residence: So I think I am good on the 3 years). We got back together and in the time we were split she bought a house on land Contract from her parents (which makes her uneligible due to family member).
    Question is: If I buy the house from her parents or her on land contract or get added to the current contrct will I be eligible for the $8000.00? We are NOT remarried at this time.
    Thank you

  51. Also just to clarify and ask:
    I owned a house in Ohio until it was sold on a short sale in Dec 07. But my primary residence was in Mich was established in April 07 where I was renting a home and working. My understanding is the home had to be a primary residence which it was not. Is this correct?

    1. Ugh complicated.
      I am not sure because they are to be arms length. I will email the ruling and you can take it from there by asking an attorney. I know you are not married but you are in a relationship so that would not be considered arms length in the spirit of the law. But, may be legal.

      I would not want to take the liberty to advise you on that one. But, adding you to the deed, definitely would not work. I will post on my community blog and see what kind of answers we get from others.

  52. We bought our mobile home brand new in 1999. We were finally able to to finance land in August of 2009 and get our mobile home moved to it. This is our permanent residence. Can we claim the land loan?

  53. No, we financed the mobile home by itself at the time. Nobody let us know about a home and land option and we were just starting off, so didn’t know any better. When we did, it was too late. We’ve finally got our own land and moved everything to it. I just didn’t know if just land would qualify for the tax credit.

  54. I bought a house in 2006 and paid cash, my wife was on the deed. We seperated in August of 2008. She has since purchased a home. Being she was on the deed of the house that I bought is she still elligible for the first home purchase deduction? This is the first house she has purchased and she has been removed from my deed.

  55. my wife and i built a house on land of my fathers and instead of waiting on a deed we ended up just purchasing the land and home we built from him to ease some paperwork. we paid fair market value for the house through a mortgage company. Is myself or my wife eligible for THe Tax credit being that she is not a blood relative? Thanks

    1. Reed, I don’t think so the rule is “arms length” transaction. You are married so you are treated as a married couple.
      However, feel free to contact the IRS as they are quite knowledgeable.

  56. Me and my wife moved into a mobile home in august of 2006. My mother-n-law bought the home on a credit card. There was not a title for the home for that perticuler year model. The bill of sale had my wifes and mother-n-laws name on it. we paid my mother-n-law payments on it then she took her name off of the bill of sale and put just my wifes name. We are closing on a home in march will we get the tax credit

  57. hi, just want to check how long to recieve the tax refund of 8,000.00 for the first time home buyer,because we both a house last october 2009 and we mail the form for the 8k like 2 weeks ago.
    It will be a big help if you can let me know the answer.

    Thanks
    MAss. LM

  58. If the downpayment was gifted to me from a family member to purchase a home do I have to give the mortgage lender information on who gifted the money?

  59. Hi Missy,

    My husband and I had closed on our house April 1, 2008 right before the tax credit. Is there anyway or anything we can do to get that credit. We have already file our 2009 tax. Thanks.

  60. The wife and I bought a double wide in November and qualify for the 8,000 its April we got a letter from IRS asking us for, Executed retail sales contract, property address, sales price, and date of purchase,. What is up with all this, the sales price really isn’t any ones business is it???

  61. Hi Missy! My Boyfriend and I are purchasing a house from my mother for fair market value. Will he qualify for the $8,000.00 Refund even though I won’t??

  62. Question, my fiancee is purchasing a house and we have decided to just put my name on the deed after closing. Will I be eligible for the first-time homebuyer’s credit.

    1. It is not the deed you have to send to the IRS but the closing statement, which will show you bought the house. You might be qualified for the 6500.0 move up buyer credit.

  63. My husband and I haven’t owned a home in over 5 years. We fall below the income budget. We are buying a home and will qualify for the credit. We file our taxes seperate the home mortgage is in my name only. Do we qualify for the 8K or do we only get the reduced 4K?

Thoughts?