Who said we are in a bad market. House prices have had BIG declines which creates opportunity for those individuals (future homeowners) who couldn't afford to buy a house in the "blooming" market. Now is the time to buy! Take advantage...the government is acting on the problem by creating these bills and now this tax credit to create an incentive to buy, if the decline in market values wasn't enough. Aside from being a experienced tax preparer, I am also a NJ Real Estate agent. And I specialize in helping First-Time HomeBuyers. Connect with me to discuss financing options. FHA is the way right now. With a min 3% down you can get qualified for that new home. For those homes that need some updated, FHA 203K will allow up to $35,000 for repair cost. And then for tax season of 2008 you can claim the Homebuyer tax credit (if you qualify) and receive a (bigger) refund.Below I included an article which goes into details about the $7500 HomeBuyer Tax Credit for 2008. I couldn't find it on the IRS.gov website so I had to do a search on the net. The article describes the tax credit and rules.
Some Incentives for buying a new home
The credit is available only to first-time home buyers defined as buyers who have not owned a principal residence for three-years prior to the subject purchase. The ownership test applies to both partners in a marriage; i.e. if a husband has not owned a home in the past three years but the wife has, neither spouse qualifies for the first-time home buyer tax credit. (It appears that this would be the case even if the husband is purchasing the property only in his own name.) A buyer can still be eligible for the credit even if he owns a vacation home or rental property not used as a principal residence.Single taxpayers with "modified adjusted gross income" up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. Individuals and couples with incomes above the thresholds may still qualify for a lesser credit, however, taxpayers with adjusted gross income above $95,000/ $170,000 phase out of the program completely.There is no need to fill out an application to qualify for the tax credit. First-time homebuyers merely claim the credit when filing the tax return for that year. No pre-approval is necessary, but if you are relying on this program to purchase a home you may want to check your eligibility. Your tax advisor may be able to help you with this.The credit is available even to those with little or no federal income tax liability to offset. This usually means that the government will send a check for part or all of the credit. Otherwise the credit is used to offset any unpaid taxes or increase a refund.The credit is available for homes purchased between April 9, 2008 and July 1, 2009 and applies to both new and existing homes whether attached or detached, condominiums, mobile homes, or houseboats. A homebuyer contracting for a custom built home can qualify for the credit as long as the home is first occupied between the April 2008/June 2009 dates. (For newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.)The $7,500 credit represents 10 percent of the purchase price of a low cost home. Most who use the program will be able to claim this full amount, however, in the event a home is purchased for a lesser amount, the 10 percent cap will apply. That would mean that a $65,000 purchase would result in a $6,500 credit.There are other refinements to the program. For example, if it is to his benefit, a taxpayer can apply for the credit in a different year than the home is purchased. There is also a possible forgiveness of debt for homeowners who sell the home before the loan is repaid and do not received sufficient gain from the sale to cover the loan balance. Information on these and other details of the program can be researched on a website maintained by the National Association of Homebuilders at http://www.federalhousingtaxcredit.com/.Data complied from http://www.mortgagenewsdaily.com/942008_First_Time_Homebuyer_Tax_Credit.asp
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