First time homebuyers (considered buyers who have not owned a home for the past three years) may be eligible for a tax credit up to $7,500 when they purchase a home. So you have very low interest rates, plentiful supply of homes to choose from, and attractive pricing. Plus you can get a $7,500 tax credit on the following years taxes. (Make sure you check with your accountant or tax advisor to see if this might apply to your situation.)
One of the disadvantages of the “credit” as it was originally proposed was that the amount needed to be re-paid with no interest over 15 years. There might or might not be changes in that. We should know something more definite as the economic stimulus legislation progresses.
The important thing here is to not be sitting on the sidelines when there are opportunities available. I expect that some of the best opportunities will go to those who are ready to move forward. Indianapolis real estate buyers, take note.
UPDATE FEB. 6, 2009. It appears that there are upcoming changes. First under current proposals, there will be a new $15,000 (or 10% of purchase price up to $150,00.) Second, the tax credit would really be a tax credit and it would not have to be repaid as under the current tax credit. The new credit would replace the old $7500 repayable credit. These are proposals at this point and not final legisation. Keep alert to the news about the stimulus package as it progresses through Congress.
UPDATE FEB. 12, 2009 It appears that as difference betweenHouse and Senate versions were ironed out, the $15,000 tax credit was removed. It now appears that there will be a $8,000 tax credit for first time home buyers to replace the old $7,500 tax credit.
UPDATE FEB. 15, 2009 The new $8,000 tax credit will apply on homes closing 1/1/09 to 10/30/09. On homes that closed in 2008 that were eligible before for the $7500 repayable tax credit, that is essentially unchanged. There is a comparison matrix on realtor.org. Click on the Stimulus update and then on the first time homebuyer credit. From there you should be able to get the comparison matrix. I will update this site soon with that information. The bill is expected to be signed into law early in the week by President Obama.