What Does the Economic Stimulus Package First Time Home Buyer Credit Mean For You?
Up until the last two years, the housing market was growing at a rapid pace around the country. Many families were realizing the American Dream and purchasing their first homes while others were jumping into the housing market for investment purposes. However, after the housing market collapsed and the economy began to sour, it became clear that it would take more effort to entice hesitant people into the housing market. In response to the changing economic times, Congress acted and specifically changed some provisions of the first time home buyer credit in order to provide incentives for people who were still interested in purchasing their first home.
Last year, the housing credit was set at $7500 and at that time, the housing credit had to be repaid over the course of fifteen years, with five hundred paid back each year. After the housing market changed drastically last year, Congress revisited the issue and decided to make the credit more appealing to first time home buyers. Due to changes made by the stimulus package, the first time home credit is now $8000. Instead of having to repay the tax credit back, the repayment requirement is no longer included. In addition, it is also slightly retroactive so for people who bought their homes in 2008 and filed their taxes under the old rules, it is still possible to get the $8000. In order to receive the new credit, home buyers simply need to file an amended tax return.
The main requirement that home buyers must fulfill is that the home must be the primary residence of the person claiming the home buyer credit for at least three years. For any reason, should the homeowner decide to sell the house, then the tax credit must be repaid. Similarly, if the home is no longer the homeownerÕs primary residence, then that is another situation where the tax credit must be repaid.