What’s all this talk about the federal and state government offering thousands of dollars for first- time home buyers?  Here’s the skinny on the $8,000 Tax Credit and Maine State Housing Authority $5,000  Gift of Green

 

$8,000 tax credit: 

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before December 1, 2009   receive up to $8,000, or $4,000 for married individuals filing separately.  People can claim the credit either by filing an amendment on their 2008 return or on their 2009 return next year.  You may want to discuss with your accountant how you would best benefit.

 The tax credit begins to fade out for taxpayers whose adjusted gross income is more than $75,000 or $150,000 for joint filers.  Taxpayers whose adjusted gross income is more than $95,000 ($170,000) do not qualify.

 Applies to purchases that close after April 8, 2009 and before Dec 1, 2009.  For homes you construct, the close date is the day you occupy the home.

• Applies only to homes used as taxpayer’s principal residence.
• Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.  The credit is the smaller of $8,000  ($4,000 married filing separately) or 10% of purchase price.
• Is fully refundable, meaning the credit will be paid out to eligible taxpayers even if they owe no tax or the credit is more that the tax owed.
• Must reside at residence for three years or the credit must be paid back.
• Must be a  First-time home buyer;  any person who has not owned another residence at any time during the 3 years prior to the date of purchase.

 

Maine State Housing Authority, or MSHA, Gift of Green:

 The gift of green is a grant of 4% of the mortgage amount up to $5,000

 Must be a first-time home buyer (MSHA First Home program), or veteran, or active duty military (MSHA Operation New Home program).

• Completion of approved home buyer course before closing
• Must contribute 1% of mortgage loan, of own money (this can be a gift from family member)
• Income and house price eligible, no more than $15,000 in liquid assets.
• Must live in house 9 years
• Subject to re-capture  tax if house is sold within 9 year period, or realize a gain from sale or income rises significantly
• Can be combined with other programs. These may be subject to different rules so check with your lender.

 ** may be subject to change, please check with your accountant and lender.  Call us for a list of approved lenders.