It's a great time to purchase the home of your dreams! Interest rates are low and first-time homebuyers are in luck. Congress passed an act which includes a tax credit for first-time homebuyers of up to $8,000. In fact, you may be classified as a first-time homebuyer and not even know it. If you haven't previously owned a home, you fall into the category of first-time homebuyer. But did you know that if you haven't owned a principal residence in the past three years, you also constitute a first-time homebuyer? It's true. If you fit either of these categories, the government has created a tax credit that you can take advantage of if you choose to purchase between Jan. 1 and Dec. 1, 2009. With the deadline quickly approaching, it's important to act fast.
The government is offering lesser of 10 percent of the cost of a home or $8,000 to qualifying first-time homebuyers in the form of a refundable tax credit. That means, if you owe $5,000 in taxes, you will receive a check for $3,000. If you don't owe any taxes, you may qualify to receive the full $8,000 credit. If you're lucky enough to have the government owe you money in taxes—let's say $1,000—then you could potentially receive a credit of up to $9,000.
Qualifying for this tax credit may be easier than you think. If you're a first-time homebuyer, here are a few things to consider. First, a qualifying home must be a single-family, primary residence. This can include condos, co-ops and townhouses. Secondly, your income has a bearing on whether you're a fit for this credit. The full amount of credit is available for individuals with gross incomes of no more than $75,000 (single) or $150,000 (married). The credit phases out above those caps. Check out RealLiving.com for phase-out charts, examples and a few other stipulations.
The best part about this credit is that there's no repayment as long as you don't sell the home within three years of purchase. If you choose to do so, the entire amount of credit is due back to the government at the time of sale. But this only applies to homes purchased in 2009.
If you fit these qualifications, then congratulations! You're on your way to a great real estate deal. Contact your local real estate agent to take advantage of this offer, but act now because the deadline is quickly approaching.
