The Federal stimulus law includes an $8,000 tax credit for First Time Home Buyers. This credit can be used if you purchased your house as of January 1, 2009 and up to December 1, 2009. This law extends a tax credit that was passed last year but it is improved upon.
Last year, a tax credit was passed for First Time Home Buyers of $7,500 but this money had to be paid back over time. In reality, it really was not a credit but a loan.
The new $8,000 tax credit does not have to be paid back unless you sell your home within 3 years. This will be a very important fact to keep in mind when you go to sell your home if you do take the credit.
Who is a First Time Home Buyer? This is also a very important question. For purposes of using the $8,000 tax credit, a first time home buyer is defined as someone who has not owned a home for at least three years. This means that if you owned a home in the past and sold it three or more years ago, then you would be considered a "first time home buyer" for purposes of the credit. This should be helpful to many people as well.
In North Carolina, there are two additional tax credit options that can be used in conjunction with the $8,000 tax credit. See my related article on the Mortgage Credit Certificate (MCC) and Down Payment Assistance.
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