If the timing wasn’t right for you to take advantage of the 2008 tax credit, perhaps there is still hope. The 2008 law gave home buyers who hadn’t owned a home in the last three years the right to claim an $8000 tax credit on their 2009 federal income tax return if they bought a home between January 1 and December 1 of 2009. That law is due to expire at the end of November. If you are a first time home buyer and you don’t have a purchase agreement written on a home at the time you are reading this, it’s probably too late to take advantage of the 2008 tax break.
Congress is debating several versions of a possible extension of this tax credit law. One version would award the tax credit to anyone who purchases a home, not limiting it to first time buyers. Another version would phase out the credit, extending the $8000 credit through April 1st of 2010. Then the credit would be reduced to $6000 if the home were purchased between April 1 and July 1; $4000 between July 1 and October 1 and then $2000 through the end of December 2010. A third version would increase the credit substantially, to $15,000. So you can see there is still a lot of discussion and no final decision as of October 28, 2009
There have been reports of fraud in connection with this tax credit including claims for the tax credit being submitted by children and by persons who are recent home owners. In addition, some have critiqued the tax credit stating that most of the people using the credit would have purchased a home anyhow. Other sources state that the refund accounted for at least 20% of the purchases this past year. In other words, people bought homes because of the refund who ordinarily might have waited.
When we do have a final answer, it will be published here. In the meantime, if you have questions and need answers, come to our class.
For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs. “Simple answers to home ownership questions”.