If you are thinking about buying a home - think fast, because you are about to miss out!

Last year, the government instituted a $7,500 tax credit for new home buyers that had to be paid back over a term of 15 years - with the stipulation that your home had to be purchased before the end of 2008.  Well, in an effort to stimulate the economy, President Obama has revamped the tax credit and extended it through December 1, 2009.

 But its only July....I have plenty of time to wait on the market and still claim the tax credit.

WRONG!  Think about this - In the New York area, it will take 2-3 months turnaround time from your accepted offer for you to close on your new home.  If you are waiting for Condo Board approval - or approval from a bank to buy a short shale - it could take even longer.  For you to take advantage of the 2009 tax credit...you must hold the title of your new home by December 1, 2009.  This means that you need to have an accepted offer (at least) by the end of August.

 So you have a month and a half to find your new home and get them to accept your offer...

Why should you care if you claim the First-Time Homebuyer Tax Credit?  What does it mean to you?  Um...you care - or you will after you know what its all about...

What is the First-Time Home Buyer Tax Credit?
You will receive an income tax credit to be applied towards your next filing equal to 10% of the purchase price of your new home up to $8,000.  This means if you are buying a home priced $80,000 or more - your credit will be $8,000.  This is a refundable credit - which means that if you owe $3,000 to the IRS...after your credit is applied, you will receive a tax refund of $5,000.  Under the revamped program, your tax credit DOES NOT HAVE TO BE PAID BACK TO THE GOVERNMENT. Seriously - when was the last time the government handed you even $8 - well this is 1000 times more... and all yours!

Who is eligible to claim the credit?
The law defines 'first-time buyers' as someone who has not owned a principal residence during the 3 year period before their 'new home' is purchased.  For married couples, this means neither person can have claimed ownership - for unmarried joint purchasers, only ONE of you must meet the requirement.  Married couples cannot claim over $150K income - the limit is $75K for single buyers.  There is a partial credit offered to homebuyers who make up to $20K more than the limits as well.

Rob Dietz, PhD, director of tax issues for the National Association of Home Builders explains the benefits and requirements of the tax credit in full
 

My advice is to start your New York home search right away - and not miss out on this amazing giveback from the government!!