Well, the new first time home buyer’s tax incentive must be working. With four pending sales (three of them for first time home buyers) people are paying attention. A couple of things you should know;
- A first time home buyer is someone described as a person who has not owned a home in the last three years.
- In order to take advantage of the tax incentive you must own the home you will be buying for three years.
- There are income restrictions. I believe it’s $75,000 for single buyers and $150,000 for married couples.
- The max tax credit allowable is 10% of the purchase price up to an $8,000 ceiling.
So, if you KNOW you are going to buy your first home by the end of the year you can start by withholding less money for taxes and use that money you get in addition to your usual paycheck for savings/downpayment on your first home. Of course, if you end up not buying a house by December 31st you’ll have to pay all that money back!