Tax Credits for First-time Buyers Explained

Here’s a simple guide for new homebuyers and who can avail of the credit.

Obama’s Economic Stimulus Bill has a special provision for first-time buyers. Many regard to this as a better departure from the previous tax credit proposal last year. The latter covers new buyers who purchased their homes between April 9, 2008 and December 31, 2008. They will receive a tax credit worth $7,500.

The new rule covers those who purchased their homes starting January 1 of this year and all potential buyers until December 1, 2009. Those who qualify will earn up to $8,000. But the provisions can be complicated.

Should a homeowner decide to sell the house within three years, he would have pay back a portion of the tax credit. So as an advice, don’t buy on a whim just to join the bandwagon. Make sure that you’ll be staying in your house for a longer period and won’t be compelled to relocate because of a job offer in another state. Eight thousand dollars can be used to finance home improvements and contribute to your house’s resale value eventually.