If you’ve been envying all the great incentives available to first time homebuyers right now, but can’t take advantage of them because you currently own a home or have owned one in the last three years, here’s some news that will be music to your ears:
A new $5,000 State Tax Credit goes into effect July 24th for homebuyers who purchase a newly constructed home and are not first-time homebuyers. (In certain Kentucky counties, buyers who already own a home or have recently owned a home may also be eligible for a Mortgage Credit Certificate– click here to learn more).
$5000 State Tax Credit Eligibility
This non-refundable tax credit is available to purchasers who close on a newly constructed or never-occupied home between July 24, 2009 and July 24, 2010 and do not claim the $8000 First Time Homebuyers Tax Credit on their federal tax return.
The credit does not apply to the purchase of an existing home that has been occupied, but only to newly constructed homes or homes that have never been occupied (such as a model home or completed home in a builder’s inventory).
The credit is non-refundable, which means it is used to offset a tax liability to the state of Kentucky, but cannot result in a tax refund if the tax credit exceeds the amount of tax liability.
This credit is offered exclusively by the state of Kentucky on a homebuyer’s state tax return.
To qualify, the new home buyer must use the home as a principal residence. They must also live in the home for at least two years, or the tax credit must be repaid to the state.
A total of $25 million dollars in program funds are available on a first-come, first-served basis until July 24, 2010 or until the funds run out, whichever is first.
How the Credit is Claimed
The tax credit may be claimed by qualified buyer submitting a completed application via fax within seven calendar days of closing on a new home. The application form is provided by the Kentucky Department of Revenue.
A website will be established by the Revenue Department to explain the tax credit to the public and keep track of the available program funds available in relation to the $25 million dollar cap.
Persons successfully claiming the credit will be provided a form by the Kentucky Department of Revenue that can be used in filing their state tax returns.