Homebuyer Tax Credit Details

The stimulus bill passed by Congress and signed by President Obama offers an incredible opportunity to home buyers. Here are the more of the details:

1. It is a true tax credit. First time buyers who purchase and close on a home between Jan 1, 2009 and Dec 1, 2009 will receive a credit against their 2009 Federal Income Tax of $8,000. (10% of purchase price up to a max of $8000). This is a dollar for dollar reduction in the tax you owe. If your tax bill is less than the credit, you will receive a check for the balance.
2. If the home is sold within the first 3 years after purchase, the entire amount is recaptured on sale.
3. First time buyers are defined as those who have not owned a principal residence in the last 3 years.

Consider this scenario – A first time buyer using FHA financing puts down the required 3.5% on a $200,000 property. The tax credit more than covers the $7,000 down. In addtion, property tax and mortgage interest deductions in the next year would  provide income tax deductions in excess of $10,000! Monthly payments may be even less than rental payments today.

I believe this is an incredible opportunity. If you know of family members or friends who may qualify, contact me and we can explore together.