An expanded tax break for first-time home buyers is now available under the American Recovery and Reinvestment Act of 2009, the U.S. Department of the Treasury has announced. Qualifying taxpayers who buy homes this year can receive up to $8,000 as part of the recently passed economic stimulus package.
First-time home buyers represent a significant portion of existing single-family home sales: In 2008, nearly half of the country's home buyers were buying for the first time. The expanded tax credit aims to make it easier for first-time home buyers to enter the housing market this year.
‘The expansion of the first-time home buyer tax break as part of the President's recovery agenda gives money to taxpayers when they need it most, while also targeting an important group of buyers,’ says Treasury Secretary Tim Geithner. ‘We view our economic recovery plan, our financial stability plan and now this homeowner affordability plan as three legs of the same stool – an integrated whole that represents our immediate response to the current crisis. We remain committed to swift, efficient and effective implementation of all of these components.’
The Internal Revenue Service (IRS) has posted on www.IRS.gov a revised version of Form 5405, First-Time Homebuyer Credit to incorporate provisions from the American Recovery and Reinvestment Act.
Under the new law, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim up to $8,000, or $4,000 for married individuals filing separately, on either their 2008 or 2009 tax returns. Unlike the prior first-time home buyer credit, this is money individuals do not need to pay back.