In a continuing effort to stimulate the economy by jumpstarting Golden real estate sales by first time home buyers, Congress recently enacted a bigger tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after Jan. 1, 2009 and before Dec. 1, 2009.

A tax credit is a bigger benefit than a tax deduction since it is a decrease in the amount of taxes owed. This typically results in a bigger than expected tax refund! Or if you alter your tax withholdings-- you will net considerably more from each paycheck.

The tax credit is for first time home buyers only. DON'T RULE YOURSELF OUT if you have previously owned a home. The law defines a first time buyer as one who has not owned a principal residence in the previous 3 years—a rental home or vacation home will not exclude you from this tax credit.

Most Buyers will qualify for the entire $8,000 credit since it is equal to 10%of the home’s purchase price (up to $8,000).

There are income restrictions with the credit which are important to consider. The tax credit decreases proportionately for tax payers with Modified Adjusted Gross Incomes greater than $75,000 for an individual or $150,000 for a married couple filing jointly. The tax credit is not available for those with incomes greater than $95,000 or $170,000 for married couples.

The tax credit does not have to be paid back—as long as you use the residence as a principal residence for at least three years. Any place purchased as a primary home will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats although, again, you would have to use the residence as your principal residence.

You can even build your own home—or have a contractor or new home builder to build the residence as long as long as the first date of occupancy of the new home is before December 1, 2009 and if a new home builder builds it—the closing occurs prior to December 1, 2009.

This program can be combined with the Mortgage Revenue Bond (MRB) for additional benefit.

If you are considering Denver Real Estate you may be able to take advantage of this credit.

Overall this tax credit is basically like a bonus for first time Buyers. The government is more or less paying $8,000 to you to buy a home! This combination of tax credit bonus, low interest rates, large amount of inventory and reduced prices on many homes makes it a great time to buy a home.

If you’re considering buying a home in Colorado take a look at Evergreen Real Estate.

P.S. Find out why people start saving money with the help of silver bullion bars.

Filed under: Real Estate

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