Our wonderful Government has done it again with the $8,000.00 tax credit
If your wondering what I am talking about it is the Home buyers tax credit. It was just a few days ago that everyone was extremely happy about the thoughts of having a possible $15,000 tax credit at their disposal. This was set to help so many people and it would have created jobs. Instead we get a $8,000 credit geared to First Time Homebuyers. Don't get me wrong: This is a great thing for those looking to buy there first homes but the problem is there is still a down payment issue, a closing cost issue, and in my opinion those people able to buy their first home were going to do so regardless of the credit. They have to buy the home to get the credit and then there is a year delay in getting the money back to put back into the economy. So if they were going to buy a home anyway, how does this tax credit help the economy or more people to buy homes? On the other hand, if the $15,000 credit had passed, this would have allowed first, second, and possibly third time homebuyers to buy. The tax credit still is a year out but now you have people willing to sell for less, people willing to upsize which makes homes turn. If homes turn, all walks of people make money which in turn causes people to spend money, which in turn gets people work, which causes people to spend more money which in the long run helps the economy. Okay, that enough crying over what didn't happen.
Here is what we have to work with:
1. Any 1st time homebuyer who purchases from 1/1/09 and before 12/1/09 are eligible for the credit providing their incomes are within limits of $75,000 adjusted for singles and $150,000 adjusted for married couples. Those earning more may be eligible for reduced amounts.
2. The credit is now free and unlike the first tax credit does not have to be repaid.
3. You must own the home for three years in order to take full advantage of the credit. If they sell before then they will have to return the credit. Special circumstances such as death or divorce could apply.
4. Finally, the definition of a first time homebuyer is one that has not owned a principal residence in the last 3 years.
These are my understandings of the credit and is to the best of my opinion correct, but please check it out for yourself as I am just a country boy from Alabama and may have missed something.
Have a comment or question: Please send it to Doug@RealtorsForLifeTeam.com