Uncle Sam is handing out $8000 tax credits to any and all first time home buyers who purchase before December 1 of 2009. Most government handouts come with the catch - like 2008's $7500 tax credit that amounted in nothing more than an interest-free loan from the IRS. This time around the rules are pretty basic - buyer must have income under $75k for singles ($150k for couples) and not owned a primary residence in the past three years and you are golden.
The $8000 is real money. If you normally get a tax return each year, add $8000 to the total. If you're self-employed and have to pay-in like myself, then subtract $8000 from the total. If you purchase in the first quarter of this year (like say right now), you can even apply the credit to your 2008 taxes. Buy today - get a considerable tax return tomorrow.
Here is the official homepage of the FHTC with FAQs.
Please spread the word - anyone considering a purchase this year but is not sure about timing needs to factor this substantial savings into the equation. We will add a piece on this to all of our upcoming home buying seminars.
Like always, we'd be happy to discuss this issue in more detail. Feel free to email or call. Otherwise, your personal accounts or CPA should be up to speed on the new law.