New Home Buyer Tax Credit is Bigger and Better

On Feb. 17, President Obama signed the American Recovery and Reinvestment Act of 2009 into law. As part of $787 billion in economic stimulus measures, the legislation created a home buyer tax credit that is bigger and better than the previous credit that was implemented in July 2008.

  

• Provides a tax credit equal to 10 percent of the sale price of the home, up to an $8,000 maximum. Is a true tax credit. It does not need to be repaid, unless the home owner sells the home within three years of the purchase.

• Can only be used with the purchase of a home that will be the buyer’s principal residence. It cannot be claimed for the purchase of a vacation home or property to be used as a rental. 

• Available to first-time home buyers only. A first-time home buyer is defined as someone who has not owned a principal residence for three years or more.  

• Applies to homes purchased by qualified buyers between Jan. 1 and Nov. 30, 2009. The purchase date is the date when closing occurs and the title transfers.

“This new tax credit provides an unprecedented opportunity for people looking to buy their first home,” said Home Builders Association of Greater Springfield President Rusty MacLachlan.  “Not only will they receive an $8,000 tax credit, they also will be taking advantage of record-low interest rates, a large selection of homes to choose from and competitive home prices.”

House hunters will also find that many builders have inventory that is “move-in ready” and priced favorably for buyers.  Also, owners of existing homes who are looking to trade-up or relocate are ready to bargain.  And, as a long-term investment, homeownership remains a solid investment for Americans.

MacLachlan warns, however, that this opportunity won’t be around forever.  “Keep in mind that you have to purchase your house on or before Nov. 30.”