{"id":4329,"date":"2016-04-27T11:12:51","date_gmt":"2016-04-27T11:12:51","guid":{"rendered":"https:\/\/www.movoto.com\/foundation\/?p=4329"},"modified":"2016-04-27T11:12:51","modified_gmt":"2016-04-27T11:12:51","slug":"first-time-home-buyers-understanding-tax-breaks-for-home-owners","status":"publish","type":"post","link":"https:\/\/www.movoto.com\/blog\/first-time-home-buyers-understanding-tax-breaks-for-home-owners\/","title":{"rendered":"First Time Home Buyers: Understanding Tax Breaks for Home Owners"},"content":{"rendered":"

First time home buyers<\/a>\u00a0have some of the greatest opportunities in the real estate market afforded to them. If you are a first time home buyer, a large part of your research must include the subsidies and the tax breaks that you have at your disposal.\u00a0This article will deal specifically with the tax breaks that you can receive just for being a first timer.<\/p>\n

What is a first time home buyer?<\/b><\/em><\/p>\n

\"first<\/p>\n

Source: support-eam.org<\/em><\/div>\n

The government definition of a first time home buyer is a bit differently from what you may think: You are a first timer as long as you have not owned a personal residence in the last three years. This means that you can actually be a first time home buyer many times in your life, so make sure that you adjust your definition to match the government’s when you are dealing with real estate.<\/p>\n

What are some of the tax breaks that are specific to first time home buyers?<\/b><\/em><\/p>\n

The United States Department of Housing and Urban Development (HUD) is one of the best places to look for first time home buyer credits and deductions. The HUD website has a long list of programs<\/a> from states and some private entities that give breaks to first time home buyers. HUD itself does not give money to potential home owners, it is only the first step. The grants that it gives can move to one of any number of private lenders or state governments. For instance, following the HUD search engine through to the HUD California page<\/a> leads to a list of links with first time home buyer programs from Alameda, El Cajon, El Centro, Encinitas, Escondido, Menlo Park, Santee, San Diego, and\u00a0San Pablo. There are pages with link lists from the HUD website like this for every state.<\/p>\n

Qualifications are much different depending on the state program that ends up deciding how to distribute the money to home buyers. Get in touch with the state and municipal organizations that HUD empowers with its grants to understand all of your options, and keep these options in mind when you are looking at a location for your first home.<\/p>\n

Are there any IRA benefits?<\/b><\/em><\/p>\n

In order to discourage the average person from raiding a retirement account before it fully matures, the federal government assigns a 10 percent early withdrawal penalty to any draw from an IRA that occurs before the official retirement age. However, this penalty is lifted specifically for the purpose of buying a first home. A first time home buyer can take a draw of up to $10,000 without this 10 percent penalty for the early withdrawal.<\/p>\n

Keep in mind that the government’s definition of a first time home buyer is different from the common sense definition, and use your resources accordingly. Also, the first time home buyer benefit<\/a> applies to the additional 10 percent penalty on early withdrawal, not the normal taxes that are assessed on every income stream. This means that traditional IRA withdrawals will still be subject to normal income tax. A Roth IRA account will have no tax involved, because Roth IRA accounts are funded with money that has already been taxed.<\/p>\n

Are there any other limitations on the state programs?<\/b><\/em><\/p>\n

\"first<\/p>\n

Source: sellmymetrowesthome.com<\/em><\/div>\n

The first time home buyer\u00a0state programs<\/a> that you can come to through HUD or through other means all have different requirements for the money. However, most states will implement a max loan limit on the amount borrowed. Most of them will also prioritize people who bring in a lower income. Additional benefits to a state program include down payment assistance programs and deferring closing costs. First time home buyers may also get rehabilitation and renovation\u00a0costs included, so do not think that you have to focus on turn key properties in order to take advantage of the tax breaks and other advantages.<\/p>\n

Do Native Americans have any options as first time home buyers?<\/b><\/em><\/p>\n

The Section 184 loan program is one of the most advantageous government programs for first time home buyers in the United States. Borrowers are only required to bring 1.5 percent up front, and 2.25 percent on a loan that is above $50,000. Another advantage is that the loan interest rate is not based on the credit score of the borrower at all; rather, it is based on the current interest rate in the market.<\/p>\n

As Native American buyers are taking advantage of these options, they can also take advantage of the natural tax advantages of creating a mortgage. First of all, mortgage interest is a tax deductible expense. Secondly, Native Americans\u00a0may\u00a0also waive the 10 percent early withdrawal\u00a0penalty for IRA withdrawals.<\/p>\n

Does the federal government offer any direct first time home buyer tax credits?<\/b><\/em><\/p>\n

\"first<\/p>\n

Source: politic365.com<\/em><\/div>\n

Unfortunately, there are not anymore direct benefits from the federal government for first time home buyers. That program ended in 2010, so do not claim this on your taxes.<\/p>\n

2 Point Highlight<\/h2>\n

For instance, following the HUD search engine through to the HUD California page leads to a list of links with first time home buyer programs from Alameda, El Cajon, El Centro, Encinitas, Escondido, Menlo Park, Santee, San Diego, and\u00a0San Pablo.<\/p>\n

First time home buyers may also get rehabilitation and renovation\u00a0costs included, so do not think that you have to focus on turn key properties in order to take advantage of the tax breaks and other advantages.<\/p>\n","protected":false},"excerpt":{"rendered":"

First time home buyers\u00a0have some of the greatest opportunities in the real estate market afforded to them. If you are a first time home buyer, a large part of your research must include the subsidies and the tax breaks that you have at your disposal.\u00a0This article will deal specifically with the tax breaks that you can receive just for being a first timer. What is a first time home buyer? Source: support-eam.org The government definition of a first time home buyer is a bit differently from what you may think: You are a first timer as long as you have […]<\/p>\n","protected":false},"author":3,"featured_media":4330,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[248],"tags":[],"class_list":["post-4329","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taxes","post--single"],"yoast_head":"\nFirst Time Home Buyers: Understanding Tax Breaks for Home Owners<\/title>\n<meta name=\"description\" content=\"You can start with HUD for a first time home buyer program, but this is just the first step.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.movoto.com\/blog\/first-time-home-buyers-understanding-tax-breaks-for-home-owners\/\" 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