If you buy the new home as a 1st Time Home buyer in 2009, you will get an $8,000 credit against your 2009 or 2008 tax return.There is no requirement to repay the credit as was in effect last year (2008) unless you STOP living in the home within the first 3 YEARS of ownership.
There are income limitations to claiming the credit ($75,000 individually and $150,000 jointly).
Here are some considerations you need to ponder.
Sales people or those who’s income is likely to increase from this year to the next, may want to get a hustle on and purchase a home this year. That would be close by April 2009. If your income is likely to exceed the maximum of $75,000/$150,000 next year it would make sense to BUY NOW. Of course this is a very good problem to have.
The 3 YEARS of ownership should be a concern to buyers who are uncertain as to whether they are staying in one place that long. It shouldn’t prevent one from purchasing a home and writing off the $8,000 credit, but it should create a very strong case so SAVING THAT $8,000 UNTIL THE 3 YEARS is up. Just saying…
BUYER NOTE: We have seen a significant JUMP in activity since the First Time Buyer Tax Credit has been announced. Don’t be surprised if you pass other home buyers coming and going as you are looking. This stimulus is meant to solve some of our real estate problems but it is also going to create an urgency in the market so be prepared. Get pre-approved and bring your check book, otherwise you risk disappointment.
Happy House Hunting!
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About the Author
Kristal has been helping buyers and sellers in Colorado since 1984. She enjoys sharing her knowledge of the Metro Denver Real Estate market via blogging and in person while driving around the beautiful Rocky Mountain town of Denver! For fun, Kristal enjoys shooting things with a Canon. Visit Denver Photo Blog