In 2008, Congress enacted a $7,500 tax credit designed to be an incentive for first time homebuyers to purchase a home.  Its design was a means to decrease the over supply of homes for sale.

For 2009, Congress has increased the credit, and made several improvements that "seem to good to be true", but here they are. First the $8,000 tax credit is a true credit with no payback provision if you stay in your home for three or more years, and includes a provision that pays the first time homebuyer a bonus if they don't owe the full amount of the tax credit they receive.  The credit (10% of the purchase price up to $8,000) is paid in total to the taxpayer.  Here's an example:  The "first time" homebuyer pays $80,000 or more for their new residence, they receive an $8,000 tax credit.  Should their total tax liability be only $5,000, they receive that amount as a tax credit.  (Taxes they do not have to pay) They not only wipe out all the taxes they would have to pay, they also receive a difference of $3,000 in the form of a "refundable" credit.  Just think the buyer gets a refund in the mail of $5,000 if they already paid their taxes and a bonus check of $3,000.  "What a life".

There are some income restrictions of course.  $75,000 for individuals and $150,000 for married couples filing jointly.  The home must be located in the USA, and the credit cannot be used as part of the down payment. 

There is some relief in the 3-year rule.  No re-capture for death of a homeowner, and special rules make adjustments for people who have to sell as part of a divorce settlement, or destruction of  the home by a natural disaster.

First time homebuyer is defined as an individual who has not owned a principle residence in the last three years.  Any first time homebuyer just cannot pass this up.  It's like money falling from the sky as we see it.

On November 30th Congress extended the 10% Tax Credit of up to $8,000 thru April 30th 2010. The first time home buyer must be under contract by thet date, and close by June 30th. Congress also extended the eligibilty to buyers who currently own their home. Those who own must have owned and occupied their current home for at least five years, to be eligible for the 10% Tax Credit up to $6,500.

We encorage buyers to take advantage of the great opportunity before it's too late.

Call Burgan Real Estate, Ltd. 330-783-0055 for more information.