Earlier today, President Obama signed into law the American Recovery and Reinvestment Act of 2009 and one of the items in the stimulus package was an $8,000 tax credit for first time home buyers.
$8000 tax credit highlights include:
- It is available only to first-time home buyers
- The tax credit is available only when the first-time home buyers buy a primary residence
- First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
- It does not require repayment
- The credit is claimed on your tax return and reduces your tax liability. If you have more credit than you owe in taxes, you will be issued a “refund” check
- If you sell the home within 3 years, the entire amount of the tax credit must be paid back
Now that the tax credit has been passed into law, it is a good time for first time home buyers to take advantage of this break because there are many bargains in the Arizona market right now.
Over time, you can reasonably expect interest rates to go higher, it is only a question of how long they will stay as low as they have been . If interest rates are low, there are good “deals” on properties and the government is giving you an incentive to buy?
I think those are three great reasons that now is a great time to buy a house if you are thinking about it. Sitting on the fence has become a favorite past time for good reason, however with rates, prices and tax breaks this might be a great time to make that move!
Or you can wait around and wait for one of those three things (housing prices, low interest rates, government tax breaks) to change… But if you do, be careful — the change might be for the worse.
First time home buyers may have a great opportunity now and in the coming months. You need to look at your situation and see what is right for you, both now and over the long term. As scary as it looks now, buying in a down market may be the best thing you can do.
If you are a first time home buyer or want to know exactly what it takes to buy a home and get a mortgage in today’s market, be sure to contact Justin McHood at 480.374.0303
If you are just beginning your home search be sure to stop by the Phoenix MLS Home Search page for the most current active listings in the Phoenix metro area.
 |
 |
 |
 |
 |
About Justin McHood
Facebook
Twitter
LinkedIn
Flickr
It’s really a good news for those who are first time home buyers and also I appreciate Mr.Obama for his tax credit of $8,000 dollar. As of now I think this package will be very good for first time buyers. But one thing I would like to confirm and that is about the tax credit, has the law (tax credit) been implemented for all the states or it is only for Arizona itself? Please confirm. Thank you.
@Martha,
Thanks for stopping by and commenting! This tax credit is for all states – and here is a great resource from the National Association of Homebuilders that can answer many (if not all) of your questions.
http://www.federalhousingtaxcredit.com/
Justin
Question- I qualify as a first time home buyer. I am renting now. I am retired and would like to buy a retirement home, one I would live in hopefully for decades. However, I would live in this retirement home part time(winters) for a few years. Would this purchase qualify?
Hi Justin, Thanks for giving your kind value to my comment and I visited the site you referred (http://www.federalhousingtaxcredit.com/). All my queries have been resolved. Once again I would like to thank you for sharing such a nice source of information.