Two exciting things on the home front in the same day? (Get it? “Home” front? Oh, sometimes I kill myself.) I’m up late sharing this information, which I just managed to track down, because there are some exciting possibilities here. Especially for those of you with young adult kids who haven’t bought their first home yet.

The “perhaps it will stimulate” bill included important changes to that $7500 first-time home buyer loan – er, tax credit – as amended by the American Recovery and Reinvestment Act of 2009 (HR 1). My favorite is a provision that allows buyers to alter their tax withholding to save up for a down payment and buy late in the year!

Changes to the first-time home buyers tax credit program include:

          1. The maximum tax credit is now $8,000 or 10% of the home purchase, whichever is less.

          2. Home buyers (either spouse if filing jointly) who have not owned a principal residence during the 3-year period prior to the purchase are eligible for the tax credit. Owning a vacation home or rental home doesn’t disqualify you.

          3. Married couples’ “modified adjusted gross income” (MAGI) must be under $150,000; single filers’ MAGI must be less than $75,000. Partial tax credits may be available for married couples when their MAGI is over $150,000 but under $170,000, and for single filers who have a MAGI of more than $75,000 but less than $95,000.

          4. Home buyers who qualify but don’t intend to purchase a home till the end of 2009 may elect to alter their tax withholdings (up to the amount of the tax credit) in order to save up money for a down payment. The taxes must be repaid to the IRS, however, if the purchase of the home does not occur.

          5. The credit is available to buyers who purchase and close on a home on or after 1/1/09 and before 12/31/09.

          6. The law allows taxpayers to elect to treat qualified 2009 purchases as a 2008 purchase and receive the tax credit on their 2008 tax returns.

          7. 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.

          8. You must own the home for at least 36 months to avoid a recapture or repayment clause.

Damn it, Jim, I’m a doctor, not a tax accountant. Wait, I’m not even a doctor. I’m merely a Realtor, and not qualified to give tax advice. Please consult your accountant or tax advisor to be sure you’re eligible before making the decision to buy a home or make changes to your tax status.

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