True or False? Uncle Sam wants to give you $8000?

If you're a first-time homebuyer, the answer is YES!

Yes, "Bailout Mania" actually has some perks for ordinary folks, and for our beleagured real estate industry as well!

First-time homebuyers who purchase a home in 2009 get a refundable tax credit of 10% of the price of the home, or $8000, whichever is less. And it applies for single taxpayers earning up to $75,000 and married couples earning up to $150,000! (Taxpayers earning more than these ceilings may qualify for a reduced amount of credit.) And, by the way, anyone who has not owned a home for the past three years qualifies as a "first-time homebuyer" according to Uncle Sam!

Keep in mind, this is not a tax deduction, it's an actual tax credit, so you get the full amount, direct from Uncle Sam to you! Not only that, it's a refundable tax credit, which means you get the full amount, even if your tax liability is less than $8000! 

In essence, the government will pay the first $8000 or 10% of the cost of your home! If you close on the new home by April 15, 2009, you can even claim the credit on your 2008 taxes; if you close between April 16th and December 31, 2009, you claim the credit on your 2009 taxes.

Sound confusing? Let's look at some examples.

Question 1: Suppose you've already had $5000 withheld from your paychecks, close on a $70,000 house on April 10, 2009, and are expecting an $800 tax refund from your 2008 taxes already? Answer: You claim the credit for the 2008 tax year, and the government cuts you a check for your $800 refund AND your 10% tax credit of $7000, for a total of $7800!

 Question 2: Suppose you buy a $70,000 home, closing on May 1, 2009. During 2009, you have $7000 in taxes withheld, and should ordinarily get a $1000 tax refund when you file your 2009 taxes. After you file those 2009 taxes, Uncle Sam will send you a check for $9000 (your $8000 credit plus the $1000 refund)!

This is great news for first-time buyers and folks who haven't owned a home for a while! Qualifying veterans, or those purchasing qualifying rural properties may still be able to obtain mortgages with 0% down payments, too! (Areas around Albuquerque like Valencia County and Torrance County, for example, can qualify for these special "rural housing" loans; contact me for more information!) So if you qualify for one of these no-down loans, you can buy a house with no money down, and have the government hand you a check for $8000 (an ideal housewarming gift that would allow you to spiff up that new home with things like new furniture, appliances, landscaping, etc.! Get an even better deal by using that cash influx to make some green, evironmentally sound improvements that earn you even MORE tax credits, like solar energy and energy-efficient windows, insulation, heating & air-conditioning, etc.! )

For more information about these tax credits, available mortages,  how these apply to you in your Albuquerque real estate purchases,  give me a call at 505 -239-4796 any time, and, as always, check with your accountant or mortgage lender to determine exactly how this new opportunity would apply in your exact situation!