Georgia Mortgage Tax Credit

Mortgage Tax Credit: First-Time Home Buyer Tax Credit at a Glance Federal and State Tax Credits FEDERAL: $8,000 First-time Home Buyer Tax Credit at a Glance The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase. The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase. The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000. The tax credit applies only to homes priced at $800,000 or less. The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify. For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit. The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years. The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase. The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. The tax credit applies only to homes priced at $800,000 or less. The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010. Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit. STATE: At this time the Georgia home buyer tax credit has expired. Our legislatures return the 2nd Monday in January. Currently no provision has been made to extend this credit to run concurrently with the Federal tax credit. Please contact your representatives to encourage the extension of this powerful home buyer tool. The Georgia tax credit is not limited to first-time home buyers. All purchasers of an eligible single family residence in Georgia that file a Georgia income tax return can claim the credit. Buyers may in fact file for both the Federal credit as well as the State credit. All qualifications for each credit must be met. Eligible single family residences must have been listed for sale prior to May 11, 2009 in order to qualify for the credit. The intent of the State credit is to encourage people who are “on the fence” regarding the decision to purchase or wait to go ahead and purchase. Eligible buyers must close between June 1, 2009 and Nov. 30, 2009. The original intent of the bill was aimed at reducing the housing inventory that has been on the market for an extended period of time. The State tax credit will be for (.2%) 1.2 percent of the purchase price, with a maximum credit of $1,800 (whichever is less). Homes purchased for $150,000 or more will receive a maximum of $1,800. The total amount of your credit must be claimed in one-third increments over a three year period. The maximum credit per year is $600 if you are eligible for the maximum $1,800. Any excess or unused credit may be carried forward to apply to succeeding years; tax liability. Unlike the Federal credit, the State credit has no income limits. If you are awarded the credit there are no penalties that would require you repay any portion of the credit.