$8000 Tax Credit for First Time Buyers
Home seller’s and real estate agent’s are waking up to the fact that nearly half of all buyer’s shopping for a home are first time home buyers.
Sellers should realize the timely opportunities that are available to this group, and they should be aware of all the benefits today’s first time home buyer will receive, in order to successfully do business with them.
One unique opportunity that provides immediate benefits for home sellers and first time buyers is an $8000 tax credit incentive from the US government. The purpose of the program is to encourage home sales and provide a much needed boost to the US economy.
Outline of the $8000 Tax Credit Program is as follows:
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The Tax Credit is available for First Time Home Buyers Only. (First Time Buyers are defined as anyone who has not owned real property in the past 3 years.)
- The home must be used as the buyer’s primary residence.
- The home must close January 1, 2009-December 1, 2009.
- The buyer claims the $8000 on their tax returns, which greatly reduces their tax liability.
- The $8000 does not need to be repaid, unless the buyer resells the home within 3 years of purchase.
The National Association of Realtors, who backed the plan, estimates that the tax credit will stimulate up to 300,000 home sales. The NAR also feels that the bill will help stablize home values and could possibly help some distressed seller’s avoid foreclosure.
To read more about working with first time buyers, click here.
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2 Responses to “$8000 Tax Credit for First Time Buyers”
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While the $8000 is a nice incentive, it does nothing to make a home more affordable since the loan has to be approved, the sale closed and 2009 tax return filed before the buyer will receive the credit.
This may push a few fence sitters over the edge, but for the most part, I don’t see it as having a major effect on the housing market.
How will $8000 that I get a year from now help me buy a home today?
Allen, I agree that the $8000 tax credit will not make buying a home more affordable now, but it is an $8000 windfall none the less. It will certainly help to encourage fence sitters to buy a home now. Why wouldn’t they?
House prices having fallen dramatically in most of the US, which makes buying a home versus renting one very attractive to a lot of people. Throw in historically low interest rates, which are likely to rise later in the year and you see that buyer’s have a lot of reasons to get off the fence. The $8000 is just a bonus. I sure wish I would have gotten one when I bought a home.
Kudo’s to the Obama team for getting the $8000 tax credit passed through both houses. The announcement stirred up activity in the market, which helps seller’s, and represents wonderful savings for first time buyers!