Economic Stimulus-What First Time Home Buyers Need to Know

Due to the economic stimulus plan, buying now offers many benefits for first time home buyers. It will be beneficial to you and your clients to make sure that they are educated on the current changes and how they can benefit from them.

1. Up to $8,000 for first time home buyers: The economic stimulus plan includes a tax credit of up to $8,000 for first time home buyers. Not only do you have to be a first time home buyer but they must use the property purchased as their principle residence. The great thing about the $8,000 tax credit is that it does not have to be repaid like the previous $7,500 tax credit.

2. Who is a first time home buyer: According to the economic stimulus plan, someone who has not purchased or owned a residence used as their principle residence for three years prior to the purchase of a home will qualify as a first time home buyer. This means that if your client has a rental property or a seasonal property that has not used for your principle residence three years before the purchase of a home, they can still get the tax credit.

3. Purchase time frame: They must purchase their home between January 1^st, 2009 and December 31^st, 2009 in order to receive the tax credit.

4. Limitations on income: There are certain income limitations in order to receive the tax credit. For single home buyers their adjusted gross income needs to be less that $75,000 to be qualified to receive the full tax credit and for those who are married their adjusted gross income needs to be less than $150,000 to received the full tax credit. If your clients earn more, they may still be qualified to receive reduced tax credits.

5. Other information: This is a very important point. Your client must own the home for at least 3 years. If they sell your home within three years, they will be responsible for repaying the credit. Some exceptions to this would be in the event of death or divorce.

In addition to these legislative changes, there is now $8,000 credit available for first-time homebuyers. This new tax credit is geared toward home purchases between January 1 and December 1, 2009. The qualifying criteria for this credit are:

•    You purchase (d) a home between January 1, 2009 and December 1, 2009.

•    You live in your new home for at least 3 years.

•    You are a first-time homebuyer, or have not owned a home in the last 3 years.

Although this is not a complete listing of all the items contained in the stimulus,this is the basic need to know information concerning the economic stimulus and first time home buyers.

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