The Stimulus bill signed by President Obama has a terrific benefit in it for first time home buyers and for people who have not owned a home for over three years.
First-time home buyers (including those who haven't owned for three years) 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. The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Another provision of the stimulus bill is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
We believe these initiatives will help provide stability for the real estate market and give folks confidence to make a purchasing decision.
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