First Time Home Buyer Tax Credit Makes Housing Affordable

The economy is a strange thing. The recent surge of foreclosed condos has created more affordable opportunities for homeownership than ever before. Many condo developments sit empty while their frustrated housing managers struggle to find buyers. This has lead to a drop in condo prices, making owning a condominium an affordable opportunity. At the same time, the economic recession makes it difficult for homeowners to even imagine pursuing their dreams. Luckily, the first time home buyer tax credit makes it suddenly feasible for many to purchase real estate and take advantage of the prices that have resulted from the disrupted housing market.

The first time home buyer tax credit allows for new homeowners to receive an $8,000 tax credit or 10 percent of the home’s value. The credit is not a loan and does not require repayment. The credit will reduce a homeowner’s tax liability; if their liability is less than $8,000, a check will be issued for the remaining amount. Since it means virtually money in the bank, the tax incentive makes it possible for more people to take advantage of the reduced prices of foreclosed condos.

The owner must live in the home for at least three years, and the home must be the primary residence. If a buyer sells a home within three years of receiving the credit, he or she will have to pay the credit back. The credit is only for homes purchased between Jan. 1, 2009 and Dec. 1, 2009.

The tax credit applies to single people who make less than $75,000 or couples who make less than $150,000.

Lawmakers had originally sought a $15,000 tax credit, but the amount was reduced through compromise. Any tax credit, however, should provide strong financial incentive for more people to own homes for the first time.

Many hope the tax incentive will help boost the housing market by filling in gaps that have been left by the real estate crisis. Many condos sit empty without buyers. With better financial capabilities of owning their own home, more and more people will be able to take advantage of the low prices that have resulted from this crisis. The more people purchase homes, the quicker the market will heal itself.

There are also numerous tax credits available for better energy efficiency, which condominium owners can use to make their condos more environmental. 30 percent of the cost of installing environmental features in a home can be recouped.

The homebuyer tax incentive may have a limited effect on the market, as first time homeowners are only a small percentage of all real estate sales. This incentive, however, does help make home ownership a more realistic opportunity, enabling more to build a stable financial future. The incentive, combined with the opportunities in housing, makes condo living an affordable possibility.

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