First Time Homebuyers: There Might Not Be A Better Time to Buy Than Now
Wooohooo! The first time home buyer tax credit has been passed. And what, you might ask, does that mean for you? Well, let’s go through some of the basic guidelines for what is required to qualify for this tax credit (from www.realtor.org):
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:The price of the home-the credit is equal to 10% of the purchase price of the home, up to $8,000. The buyer’s income-single buyers with incomes up to $75,000 and married couples with incomes up to $150,000-may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income-over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped
May 14th, 2009 at 2:58 am
You did a great job of recaping the home buyer tax credit! It is very exciting it finally got passed; I think this will help a lot with getting those people that qualify and WANT to buy, but have just been scared of the market. You are right, now may be one of the best times to buy, so long as the time is good for you.
Meg Zoller-Houston Realtor’s last blog post..Houston Real Estate Reaps Benefits of Statewide Population Growth
May 14th, 2009 at 9:51 am
I think you are right that there’s no point in waiting…there’s a lot of great homes out there for sale that are very affordable – it’s unlikely too many of them are going to go down even more. Plus tax credits can be pretty helpful too depending on the situation.
Chelle’s last blog post..10 Ways to Make Your Website More User Friendly
May 14th, 2009 at 1:00 pm
Nice break down of the first time home buyers tax. I put a video on my site as it is fairly complicated. This might be the best description I’ve seen yet. With the break ending in November, all us bloggers need to get the word out. When the summer winds down and this expires, I have a feeling things will be very very slow in the winter. I do see a more promising 2010 though. Let’s hope Obama will get the break extended through the winter.
May 16th, 2009 at 10:01 am
Though the tax credit will help, I do not think it will make a “dramatic” difference. There are a ton a great deals out there right now, but despite that people are not buying because they are afraid, as they should be. The tax credit will encourage people to buy a new home, and because of that it is a good idea, but it will in most cases not enable them to. It will also not free up credit, a major issue now with most very large purchases (e.g. cars).
Cheers,Harry,Panama property
May 19th, 2009 at 6:59 pm
Another home buying incentive for military buyers: VA allows home buyers to receive up to 4% of the sales price from the seller to pay off credit cards or other debts, which can help buyers qualify for a loan by reducing their debt ratio.
May 24th, 2009 at 8:33 pm
That sounds like an interesting system. Similar to what we have over here in Australia, but we get $14,000 for first home buyers and if they are purchasing a new house then they get an extra $7,000!
Tom’s last blog post..Country House Plans: Builders Series
May 25th, 2009 at 5:01 pm
Yes, with interest rates at historic lows and the First Time Buyers tax break, I do feel it is a wonderful time to buy for those who can afford a house payment. If buyers feel pretty secure in their jobs, I would encourage them to go ahead. To be locked in a 30 year note with these rates is great. Interesting to read the comment about what is happening in Australia. In the Austin, Texas area our market is not suffering like so many areas of the US.
June 5th, 2009 at 11:49 am
The tax credit would be very appealing to first time buyers and is an innovative proposal in the current financial climate. However, such buyers are likely to move house within three years and could end up tied to their first home if they cannot afford to repay the tax credit.
June 10th, 2009 at 8:28 pm
The 1st time buyers tax credit combined with a low interest rate environment and housing values that have dropped quite a bit have really sparked the market in my area of Massachusetts. The activity and volume a 1st time buyers looking at and purchasing homes has really increased tremendously. Hopefully the bump in rates will not slow things too much.
June 23rd, 2009 at 9:01 am
Unfortunately, France doesn’t have 1st time home buyer incentives for foreign investors. A pity for those wanting to pack up and move to sunnier climates from Britain…