The Truth About the First-Time Homebuyer Tax Credit

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In 2008 Congress set into action a tax credit that was to ignite a fire in first-time home-buyers, one that would elevate home purchases, thus decreasing the over-supply of houses on the market.  Once again, as many know, they did the same in 2009, but this time Congress increased the credit from $7,500 to $8,000 and made the 2009 credit with a few more perks than that of the 2008 incentive.  What a deal!  The 2009 new home-buyer tax incentive is open to any new home-buyer, meaning that so long as you have not had any ownership in a home in the three years leading up to the purchase you qualify for some form of the credit.  There are a few stipulations, like income and obviously that the purchase must be within the United States.  In 2008 there was another stipulation regarding mortgage revenue bonds (tax-exempt bonds issued by a state housing agency), this is no longer applied to the 2009 tax credit.  Another perk of purchasing this year one may ask?  Unlike the 2008 incentive home-buyers are not ever going to have to ever repay their 2009 tax credit. 

Now what do you as a prospective first-time home-buyer need to keep in mind about getting into the purchase of a home using this credit?  The first item to keep in mind is that there is a time limit.  As of late there has been a hysteria released into the public that in order to take advantage of the credit you must jump NOW.  This is not 100% the truth.  Much of what your dead-line will be decided upon is your lender.  If you are in contact with a lender that is efficient it is very probable that you will be able to close in as little as 30 days, thus making the deadline closer to the end of October, not the end of September as the general public is saying.  The other thought to keep in the back of your mind upon purchase is if this is going to be a long-term investment.  One clause that the 2009 incentive has is that the property must not be sold within the next three years, or the original purchaser will be required to repay all of the credit you received from the government.  This is the same 3-year recapture rule that was relevant in the 2008 incentive as well. 

To summarize the Truth About the First-Time Homebuyer Tax Credit there are three key elements to remember; 1) Know your income and thus the amount of credit available to you, 2) Although the dead-line is quickly approaching, keep your cool and know who you're working with to ensure that you will benefit from the 2009 First-Time Homebuyer Tax Credit, and 3)Enjoy the home you purchased for years to come to guarantee that you will not have to repay the credit you deserved.

Be sure to check my website for another link with more information on the truth about the first-time homebuyer tax credit and information on CHFA's Jumpstart, the program that allows buyers to take advantage of the first-time home-buyer tax credit now, when they buy, rather than waiting until they file their 2009 tax return. Harris Real Estate Group







Thanks to the National Association of Realtors Government Affairs Update that helped educate and provide sound information of the Truth About the First-Time Homebuyers Tax Credit.









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debbie harris
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