Michele Buckman has put together some videos discussing the current DC market and what the future may hold for the real estate market in the Washington DC area.
The American Recovery and Reinvestment Act of 2009 sets a tax credit for first-time home buyers only, defined by the IRS as someone who has not owned a principal residence during the three-year period prior to the purchase. The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000, and does not have to be repaid. Those who quality for the tax credit include single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000.
To take advantage of the tax credit, the first-time home buyer must purchase the home on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the home purchase date is the date when closing occurs and the title to the property transfers to the home owner. Types of homes that qualify for the tax credit include any home that will be used as a principal residence, which includes single-family detached homes, attached homes (townhouses and condominiums), manufactured homes, and houseboats.
How do you claim the tax credit? Simply claim the tax credit on your federal income tax return. Home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount in the 1040 income tax form for 2009 returns. No other applications or forms are required, and no pre-approval is necessary. However, you cannot claim the credit for an intended purchase for a future date; it must be a completed purchase. You should make sure that you qualify for the credit under the income limits and the first-time home buyer qualifications. Those who live in Washington, DC can not claim both the Washington, DC first time home buyer credit as well as the new credit via the American Recovery and Reinvestment Act of 2009, but can only claim one.
For more information on the American Recovery and Reinvestment Act of 2009 and what it means to you as a first-time home buyer, contact Michelle Buckman. Representing W.C. & A.N. Miller and Christie's Great Estates in Chevy Chase, Northwest Washington DC, Capitol Hill, and the Trinidad DC neighborhood, Michelle works with a full range of clients, notably first-time home buyers.