If you’re even thinking about buying your first home … if it’s just a glimmer in your eye … you should know about this. In the hotly debated Economic Stimulus Bill, there is a provision for a Refundable First-time Home Buyer Credit.
As I’ve mentioned here before, last year, Congress provided taxpayers with a refundable tax credit that was equivalent to an interest-free loan equal to 10 percent of the purchase of a home (up to $7,500) by first-time home buyers. The provision applies to homes purchased on or after April 9, 2008 and before July 1, 2009. Taxpayers receiving this tax credit are currently required to repay any amount received under this provision back to the government over 15 years in equal installments, or, if earlier, when the home is sold. The credit phases out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return). I wasn’t very thrilled about this credit, because in the end you had to pay it back.
The bill of the new stimulus bill under scrutiny eliminates the repayment obligation for taxpayers that purchase homes after January 1, 2009, increases the maximum value of the credit to $8,000, and removes the prohibition on financing by mortgage revenue bonds, and extends the availability of the credit for homes purchased before December 1, 2009. The provision would retain the credit recapture if the house is sold within three years of purchase. This proposal is estimated to cost $6.638 billion over 10 years.
Yes, taxpayers are shouldering a tremendous amount of financial burden these days. However, on a micro level, if you are one of those taxpayers thinking about buying your first home, this is your year to get a small piece of your tax contribution back in your own wallet. Let’s face it, there are a few different first time home buyer programs out there that might help you with that initial first outlay of cash, but most of them have require pretty low income levels to qualify. Much lower than $75,000 AGI (adjusted gross income) for an individual, which remains the limit on this program.
So, if you qualify based on income, understand that mortgage interest rates are extremely low, that inventory is good, and prices have come down, then what the heck are you waiting for? As of today, you’ll only get that $8000 smackers through the end of the year!
Please email me if you’d like to be enrolled in my Client Early Alert program, so you can get first notice of new homes as they come on the market. The well-priced, well-located, well-tended homes for sale in Arlington tend to sell very quickly. This has held true over many, many years, and will continue to be the case. Work with a knowledgeable real estate agent who can be instrumental in helping you to secure the home you want.
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