Posted on | October 23, 2009 | No Comments
The American Recovery and Reinvestment Act included up to an $8,000 credit for first time homebuyers (the credit is actually 10% of the value of the home purchased, up to $8,000). A first time homebuyer is someone who has not owned a house in the three years prior to the purchase. Unlike the 2008 homebuyer’s credit which has to be paid back, this credit does not have to be paid back if the homebuyer remains in the home for at least three years.
The credit can be claimed on either the 2008 or 2009 tax return, however, the home must be purchased prior to December 1, 2009 to qualify for the credit. That means that closing must occur prior to that date. So, those of you considering buying a house and taking advantage of the credit, you need to move very quickly if you are still early in the buying process.
There is some talk in Congress about extending the credit, but my advice is to close on a house prior to Dec 1, 2009 if you want to take advantage of the credit.