Regardless if you agree with the stimulus bill or not, and it seems like it doesn't matter as this was passed against many Americans wishes. The Stimulus bill which will be signed on Tue. the 17th of Feb. has a provision for the housing industry. This tax credit of up to 8000.00, or 10% of the purchase price if less than $80000.00 to 1st time home buyers. A first time home buyer is defined as someone who has not owned a residence in the past 3 years. The purchase must occur between Jan 1 2009 and Dec 1 2009 to be filed on 2009 taxes. An example of the credit would be, purchasing a home costing $100000.00 in the required time frame. The buyer files taxes in 2010 and owes $1500.00 to the IRS. This buyer will receive a $6500.00 tax refund ($8000.00 tax credit minus $1500.00 tax due = $6500.00 check to taxpayer). This will help sellers by creating buyers whom otherwise may have not considered looking right now. The one requirement will be if the buyer sells this property within 3 years the tax credit must be paid in full. This stimulus, which will either be borrowed, or just printed by the government may cause interest rates to go up. The increased credit request would be a supply and demand issue, as credit is already short in supply. The only way for rates to go is up. If you would like a more detailed explanation of what this means to you in your unique situation please contact me and I will show you how it would affect your purchase. Serving clients in Central Illinois including Macon, Moultrie, and surrounding Counties.
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