In July of 2008, the Housing and Economic Recovery Act established a temporary refundable first-time homebuyer credit equal to 10% of the purchase price of a principal residence, up to $7,500 ($3,750 if married filing separately).
The credit applied to first-time homebuyers who purchased a home on or after April 9, 2008, and before July 1, 2009.
In 2009, legislation passed that extends the credit to qualified first-time home buyers through November 30, 2009.
It also expands the credit from $7,500 to $8,000 for home purchases made after December 31, 2008, and before December 1, 2009.
Generally, a person qualified as a first-time homebuyer if your potential buyer, and their spouses were married and did not own any other principal residence during the 3-year period ending on the date of purchase.
The American Recovery and Reinvestment Act also allows your homebuyers to elect to report a qualifying home purchase made in 2009 as if it occurred on December 31, 2008 (allowing them to claim the credit on 2008 federal income tax return).
What does this mean for your retail buyers? It means that many 1st time buyers that qualify for financing are basically getting paid by the government to buy their new home! That’s why it’s called a stimulus…
What does all this mean to you? Well, with home prices and interest rates at historic lows, this great tax credit program gives potential buyers more incentive than ever to buy their new home by working with you.