First Time Home Buyer Tax Credit

Are you a buyer still on the fence whether you should buy or not? Have you been watching the market closely and trying to catch it at the right time? The time is here and not only can we share 8,000 great reasons to buy now, don’t forget to consider home prices are at lows that open up so many more avenues for not only the first time home buyers but seasoned ones as well.

While the $15,000 home-buyer tax credit died during negotiations between the House and Senate, the $787 billion stimulus bill that President Obama signed into law Tuesday includes a similar measure designed to help revive the slow beat of the real estate market. Here are a few things you should know about the newly enacted $8,000 first-time home buyer tax credit.

$8,000 for new buyers:

The tax credit only applies to first-time home buyers and principle residences but unlike the earlier $7,500 home buyer tax credit, this one does not have to be repaid.

First time buyer definition:

For the purpose of this new law, a “first-time home buyer” is someone who hasn’t owned a principle residence for three years before buying a house.

Date restrictions:

Only those who purchase a property on or after January 1, 2009 and before December 1, 2009 are eligible for the credit. If you bought a home last year you will not be eligible for the credit.

Income Limits:

Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that’s $150,000 for married couples. If you earn more than these limits you may be eligible for reduced credits.

Summary:

Maximum credit $8,000
Principle properties only
Purchasers will continue to receive refund for unused amount when tax return is filed
Income limits$75,000 single person or $150,000 married couple
3 year rule applies
No repayment for purchases on or after January 1, 2009 and before December 1, 2009
If home is sold within 3 years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009
Program ends December 1, 2009

What the stimulus plan will do in the short or long run for the housing economy is still hard to say, only time will tell. Some feel it’s the best thing going and many feel it’s like tossing 1 gallon pails of water on a 10 story office building fire. Here is the bottom line, if you’re a buyer looking for the right time how can you go wrong. You have all the tools loaded in your tool-box, low rates, low home prices, tax credits and many cities including Minneapolis offering monies back to fix up property, truly a great time to get off that fence and into home ownership.

If you would like to learn more or have questions about buying real estate give me a call at (612) 282-7653 or feel free to contact me on-line about your home search.