A current hot real estate topic is the Federal Income Tax Credit that is available to first time home buyers. As part of the economic stimulus package, first time buyers have the opportunity to get a tax credit up to $8,000 if they buy and close on a home before December 1, 2009. A first time buyer is considered to be a buyer that has not purchased a home in the past 3 years.
The property must be a principle residence and includes any single family residence including townhouses, duplexes and condominiums. The amount of the tax credit is the lesser of 10% of the cost of the home or $8,000. This tax credit is received as a refund when you file your 2009 Federal Income Tax Return. Single buyers with incomes up to $75,000 and married couples with incomes up to $150,000 may receive the maximum tax credit. Consult your tax preparation firm for more information about the amount of refund you can expect to receive.
The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. If the property is sold during the three year period, the credit will be recouped on the sale.
Another buyer incentive for the first time buyer is the Kansas City Dream Home Program. This program offers down payment and closing assistance to qualified buyer purchasing homes in the city limits of Kansas City, MO.
This program provides a forgivable loan up to 20 percent of the sales price of a home with a maximum loan amount of $20,000. No payments are required on this loan – 10% is forgiven each year for 10 years.
There are household income guidelines. For example, the maximum income by family size would include: 1 person – $39,400, 2 people – $45,050, 3 people – $50,650.
Contact us for more details on both programs. We are familiar with these programs so feel free to contact us with any questions. This is certainly a great way to build instant equity in your new home.