Finance Information - Approved Tips: First Time Home Buyers Facts

Homeowners who purchased their homes nearing the end of the 2000's may apply for tax credit, which according to the Internal Revenue Service (IRS), was in effect then. This was referred to as the "first-time homebuyer tax credit", which was in place during the years 2008, 2009, and 2010, and officially ended on April 30, 2010. If you want to know more about qualifying for this tax credit, you should know more about the tax definitions involved.

The definition of a First-Time Homebuyer is one who is buying their first home, although in tax speak it refers to other things as well. According to the IRS, a first-time homebuyer can also refer to a taxpayer who previously never owned a principle residence for 3 years before his purchase.

For example, a single parent can qualify as a first-time home buyer if they previously owned a residence with a spouse. If a person only has conjugal property with a previous spouse, they can still be considered as a first-time home buyer.

Tax credits for first-time homebuyers can apply to those who haven't owned property in the last 8 years. This also applies to individuals who may have owned property as long as 8 years ago, but sold it and moved to a condominium or apartment so this means that you can still enjoy tax credit even if at some point in your lifetime you have owned a home. The IRS has expanded the tax definition of first-time homebuyers to apply to a wider audience.

Even first time homebuyers who have entered into a binding sales arrangement for a house purchase by April 30, 2010 can still qualify for the tax credit. The IRS has put a cap on the maximum tax credit a person can receive, which is $8,000. The tax credit will always be 10% of the house's purchase price, as long as it doesn't exceed $8,000. If your home costs more than $80,000, $8,000 is still the maximum tax credit you can receive.

The National Association of Home Builders also states that tax credits of up to $6,500 are available for those who aren't first-time homebuyers as long as you purchased a home before April 30, 2010. However in order to qualify for this, you should have lived in the same house for at least 5 of the 8 most recent years before you buy your new home.

Source: http://financeautoposting.blogspot.com/2012/09/first-time-home-buyers-facts.html

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