While some home buyers have been spurred on by current prices in Massachusetts, low interest rates and a huge inventory, there is now another reason to pull the trigger on a home purchase this year.
As of March 26, 2009 there is a new economic stimulus tax credit that is providing a great opportunity for first-time home buyers.
A first-time homebuyer is defined as anyone or their spouse who has either never owned a home or has not owned a home for at the past three years.
Although there is much debate about whether or not the 2009 American Recovery and Reinvestment Act will actually stimulate the economy, this portion of the plan can help to make it more affordable for some homebuyers to get into the market.
Qualifications:
- To get the full credit you will need to live in the home for three years.
- Ownership of a vacation property does not disqualify you.
- The limit on your modified adjusted gross income is $75,000 for a single taxpayer and $150,000 for married couples. Above those limits some partial tax credits are available.
- You must use the home you buy as your principal residence rather than a second home or investment property.
- The home must be purchased between January 1 and December 1 of 2009.
Benefits:
- An $8,000 tax credit or $10% of the purchase price of your home.
- Unlike the previously offered $7,500 credit which was actually a low interest loan, the current tax credit does not have to be paid back.
If you have been holding back from making a home purchase this is a chance to put $8,000 back into your pocket in the process.
Couple that with The Buyers' Counsel's 20% cash back rebate and you have further inspiration to check out what this current housing market has to offer.
Copyright 2009 - Claudette Millette, President, TheBuyersCounsel - 800-392-1446, E-mail
Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough
The tax credit combined with the fact that we are near historic lows for interest rates makes it a great time to buy for those that know they will not need to move in a year or two.
How do you present the Tax Credit Incentive to your clients? A Tax Credit is a dollar for dollar reduction against any Income Taxes owed. Considering the fact that most 1st time home buyers get tax refunds-how can the Credit be used? I'm still trying to figure it all out as to how it will benefit new first time home buyers.
Matt:
The money comes back to the homebuyer as a refund. It is explained very well in this article from CNN Money.
Regards, Claudette
Thanks much for the info and link. It makes it clear now how it works. Add that $8K to Ca. $10K and you have a serious incentive to buy now for sure. The other added bonus is the tax write off for costs associated with the purchase. Thanks again!
This is an amazing program. I think the government may have actually done something to stimulate demand with this tax credit. I am hopeful that it will help some folks get off the fence and buy a home in our market.