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First-Time Home Buyers Tax Credit...The Details!

President Obama will be traveling to Denver to sign his newly passed "American Recovery and Reinvestment Act of 2009".

While there has been much said about the bill, the end result is yet to be seen. Changes to the First-Time Homebuyer Tax Credit are not significant. We already had a $7500 tax credit available from an earlier bill, but this one offers a non-payback plan. That is non-payback as long as the borrower owns the home for over 3 years.

In order to understand the benefits more clearly, I'm posting a chart, compliments of the National Association of REALTORS® here:

The good news for first-time home buyers who have purchased in 2009, this bill is retroactive. You too can qualify for the credit.

If you are a first-time home buyer or know of one, please pick up the phone and call me to see how you can take advantage of this tax credit and become a proud home owner soon!

NOTE: The President has also announced the NEXT big initiative will be focused on a finance and housing package. We are hoping to hear more about this as soon as this week.

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Posted by Kristal Kraft ~Denver Real Estate~303-589-2022 on 02/16/2009 04:17 PM

Comments (42)

Tax Credit for 1st Time Homebuyers in the Mortgage / Finance Channel

first time buyers, tax credit

Originally posted at: Denver Real Estate & Relocation: First-Time Home Buyers Tax Credit...The Details!

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42 Comments on First-Time Home Buyers Tax Credit...The Details!

FEB

Kristal, thank you so much for this summary! I was trying to find out information on the income caps - it would be better without any but hey! It's what we've got to work with!

You are welcome! BTW it's so nice to see your FACE here! :)

I can't wait to hear the expected Housing program tomorrow. I can't wait. I can't wait.

Kristal,

Thank you so much for the useful information. I currently am working with some first time homebuyers that were asking me for information regarding the tax credit....

Hey Lenn, Pres. Obama is doing here in Denver. You should fly in to hear it first hand.

Kristal- Thanks for posting this, I was just on the phone with some of our team members and told them I'd research how to find out the details of this. I am curious on how the credit can be given to people who just purchased as I work with a ton of first time home buyers.

Christa ~ It's a TAX credit so on April 15th they get a credit on their taxes. Note it's still 10% of the sale price or $8k whichever is less.

I heard an idea that these buyers might want to adjust their withholding once they know they are getting the credit. That way they have more money to spend now.

Good luck with it!

Thank you so much for the chart. My newlywed couple buying their 1st home will find the chart so very helpful. Thanks, again.

Hip Hip Hooray, What a plan? I thought this was an emergency last week. Why isn't it signed already, let's go we need this like yesterday. America awaits.

So it is still 10% of the purchase price up to $8000? Zippity freakin do da!

I think the credit should apply to investment purchases. too. Much of my area is resort-type. It will not help the Emerald Coast much.

Treva ~ Your newly weds will enjoy spending their $8k!

Charles ~ Hold your horses, the legislators didn't read any of it but yes, they voted on it. The Prez. will sign and make it official tomorrow.

Bill ~ I think that's still the case. Of course they didn't consult me.

Wendy ~ I would have liked the credit to apply to ALL purchases. The First time buyers aren't the only ones who should benefit. Of course didn't they dangle a $15k credit for everyone in front of our faces, than change their minds?

I certainly hope that this makes a difference in your market place. If it does, it certainly won't hurt ours!

Wonderful chart! Did the chart itself come from the NAR website? How can I get my hands on that to send to my recent buyers?

FEB

KK, looking forward to hearing the new plan for housing...Denver is the spot where everyone will be anxiously awaiting what and how housing will be saved. I'm wondering if he has a plan for the cram down through bankruptcy judges or if it's going to be the band-aid of loan modification. Time will tell.

great post -- I love the chart, makes it easy to understand!

Thanks for the info in the chart form - I was just getting the other tax credit down pat and now I have a new one to focus on. Good for the Buyers!!

That's a great chart. Helpful to understand the differences. Thank you. I still was hoping for the 15k credit.

Thank you for the information. I'll pass it along to my buyers. It's good to know. But, $500 more is not something to get real excited about. All of us could have come up with a better plan just sitting around having a cup of tea or coffee in about 30 minutes!

Kristal - excellent post, I had not seen this table yet, it clearly illustrates the differences between the two programs.

now we wait an see what happens... and we see what the housing program to be announced will be all about...

This incentive, along with continued work to lower mortgage rates, are steps that could help find a bottom of this market.

Seems that 15K credit was a bit much for the moment, but it should DEFINATELY apply to all purchases if they want to give this a strong boost in the right direction. Especially since those that will drive the economy to recovery are Investors!

So, the Prez last week said that if the stimulus package doesn't get passed within this week, we'd experience immediate and catastrophic failure of American economy. Now the stimulus package has passed through the Congress, and right away the spin docs are saying how we shouldn't expect immediate results for economic recovery, blah, blah, blah. The Prez has taken time to choose an optimum photo opt for his signing ceremony when he stressed so much on expediency. Go figure.

I believe that everyone, except investors, should be eligible for the $8,000.

So Let me get this straight. This is to be a tax CREDIT. What if you don't have a tax bill?? Don't have enough income to owe $8,000 in taxes

Krystal......thanks for the chart. I had meant to go online and capture that one. Short sweet and easy to understand for 1st timers. Anna Banana www.annabananarealty.com

I would be happy if they would just stop talking about more incentives. It causes buyers to want to wait to see before they do anything.

If we're waiting for the Fed's to FIX IT we'll be here awhile.

Kristal,

Great read, I just wrote an offer tonight for a first time home buyer. He was so excited and I reminded him to check on this but now I will be able to give him the information.

Thanks,

Chris

It is a great thing for those buying homes... but still not a real solution to the problems we have. Even a free $8000 from the government when you file taxes in 2010 won't help those that have lost their jobs or are making less buy homes. Once employment stability and income/monthly payment ratios are at decent levels will buyers come back in significant numbers.

It is a great bonus, but not a game changer. Added to low mortgage rates and decent home prices and it is a good time to buy a home, if you can afford one and hte local market is stable.

It could of been better, but it's better what it was. I get mad when they call it the stimulus. I think less than 50% can be classified as stimulative activity.

I'm wondering just how much of an impact this will have. Since it's a tax credit, buyers won't be able to claim it until 2010 when they file their taxes for this year. I would think first-time buyers would rather have more money up front (DPA) rather than a credit a year from now.

FEB

This will be great for my clients who are juggling the decision of whether to buy a house or save up for their wedding a year from now! They use their savings for the home purchase, and get the refund in time for the wedding. Bingo!

I agree with Wendy, a tax credit for investments. I am in a resort area as well.

Hope you can clarify. If you don't owe $8000 in taxes will you still get back $8000. I know people walk away with more money than they pay with the Earned income credit, but how will this work with the 1st time buyer's tax credit? All in one year? claimed over several years if taxes owed are less than $8000? I want to make sure I let my buyers fully understand how this will work.

Thank you for sharing the chart...I hadn't seen that yet. Everyone will find your info useful!

Hi KK, So it is still 10% of the purchase price up to $8000. Darn. Well, it's better than what it was.

FEB

Kristal, I love the chart! Would you mind if I copied it and sent it to my local Realtor colleagues?

FEB

We're seeing lots multiple offers here in Florida again, especially in the under $200K range. This was before this credit came along..

"I believe that everyone, except investors, should be eligible for the $8,000."

Without investors, we would starve..

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