As I rummaged the net this morning I came across a few key components of the new $8000 First-Time Homebuyers Tax Credit that was recently signed in to legisilation that have been widely over looked by most reports on the bill.

 

The Economic Stimulus Package carries these additional attributes: 

 

1. Home buyers who would qualify for the tax credit, but who do not intend to purchase a home until the end of 2009, may elect to alter their tax withholdings (up to the amount of the of the tax credit) in order to save up money for a down payment. However, if the purchase of the home does not occur, the taxes must be repaid to the IRS.

 

2. The effective date of purchase for new construction (even if the buyer the lot) is the date the owner first occupies the house. So even if construction began in 2008, as long as the home and buyers qualify for the tax credit, they will be eligible if they take possession any time during 2009. However, new construction bought from a builder is only eligible if the closing date is between January 1, 2009 and December 31, 2009.

 

3. The law allows taxpayers to treat a 2009 purchase that qualifies under the bill as a 2008 purchase so that they can receive the tax credit on their 2008 returns.

 

4. The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes.

 

5. Familial transactions are not considered a valid purchase.

 

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