Last year the government announced that if you were a first time
buyer and bought a home, you could get a $7,500 tax credit. However, this was one of those deals with more fine print than a credit card
Under the 2008 program you got a credit equal to 10 percent of the
purchase price up to $7,500 but you had to pay it back either from profits when you sold, or repaid at the rate of $500 a year beginning
In effect, it was an interest-free loan. Good, but not good enough to attract much interest from first-time buyers.
Now we have the 2009 version of the program. The dollar amount has been upped to a maximum tax credit of $8,000, and qualified borrowers do not have to repay the money. In other words, an outright gift. Real money from Uncle Sam.
Let’s look at some specifics:
You have to buy a prime residence, not an investment property or second home.
The property can be a single-family home, condo, townhouse or co-op.
Your credit is equal to 10 percent of the purchase price of the property up to $8,000.
You can buy using funds from a state-run first-time buyer program. Buyers have to own the property for at least three years. If you sell before three years the entire credit can be recaptured. Talk with your realtor to see if you qualify.