If you are a first time buyer you should be salivating at the perks available to you. Barack Obama recently passed a bill that was created to assist individuals looking to purchase there first home. The reinvestment act of 2009 guarantees that if you meet certain criteria you will rewarded with up to $8000.0 in refundable tax credits. Think about it like you are getting paid to purchase your first home, I can’t remember a time in the past where there were so many perks available for first time buyers.
Let me delve a little into what qualifies you as a first time buyer, well the first criteria would be that you of course have not purchased a home of any kind before. This fact is very clear, but the hazy part is what if I have owned a property before, the criteria for this is that you could have purchased a home in the past but as long as you have not had any type of home ownership in the previous 3 years you can still qualify for the first time buyer refundable tax credit.
How the credit works is really simple--you will receive a 10% credit up to $8000.00 maximum, the credit is based on the actual sales price. I will do a quick set of examples to make sure that you understand how the credit works, you decide to purchase a property with a price of $65,000.00 your credit will be $6500.00, on the opposite spectrum if you purchase a home with a selling price of $150,000, your credit will be the maximum of $8000.00.
This credit/grant is fully forgiven if you hold the property as your primary residence for 3 years, every year 33 1/3% of the credit or grant is forgiven. If you sell before the 3 year window is completed, the amount of the grant given will be recouped in the form of a tax penalty or lien on the property.
This program will only last for 365 days, so if you thought you may be interested in buying your home, now is the right time, it will all end on December 31, 2009.