$8,000 First-time Homebuyer Refundable Tax Credit
If you’ve been reading here long, you might guess that I am no fan of social programs. However, I am a fan of taking advantage of opportunities as they are provided… provided your use of such offerings is moving you in a positive direction. A personal example I’ll share related to Obama’s spending plan or stimulus attempt back in the first of the year.
Part of this program allowed for the government sudsidy of COBRA payments and as I was between jobs at the time, a 60+% reduction in our monthly insurance payments was a nice benefit. To have refused would have been foolish… it was offered, it was legal, it was helpful.
Similarly, the tax credit offered to first time home buyers is a unique opportunity for those who both qualify for the program and who can actually afford to purchase a new home. Prices are low and rates are low and a home is a fantastic investment over the long haul. It is not the right time for everyone, but for some it is a great time.
For this reason, I want to pass along some information about this program. Enjoy!
If you have been waiting to take advantage of the low mortgage rates currently available, now may be the time. The economic stimulus package currently being pushed by the Obama administration includes an $8,000 first-time homebuyer refundable tax credit for qualifying buyers who purchase a home between Jan. 1, 2009 and Nov. 30, 2009.
Homebuyers cannot have owned a primary home within the past three years in order to qualify as a first-time buyer and you must make less than $75,000 if single, $150,000 if married. The house that you purchase must also serve as your primary residence for at least 36 months or you will be obligated to pay back the credit. Applying for the credit is very easy- all you have to do is claim it on your tax return and no additional papers or forms are necessary. You don’t have to wait until the 2009 tax season comes around in order to get your $8,000 credit. Once you complete the purchase of your home you can get it sooner by filing an amended 2008 return.
Time is beginning to run out (the deadline is November 30th) and whether congress will extend the credit is still very much up in the air. The program so far has had a tremendous impact on new home sales and housing prices throughout the country as evident in the latest Case-Shiller index. The index showed the first increase in national home prices in three years with the National Home Price Index rising 1.4%. It will be interesting to see what direction housing prices will take in the months ahead, especially if congress decides to extend the program.
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