Being a first time home owner in the years 2008 and 2009 is fabulous because the federal government has been offering great tax credits to entice people to buy new homes. Even some states have been offering additional tax incentives.
2008 Tax Credit
We bought our home in 2008 in Northern California and we were thrilled to discover that we would receive the federal tax credit because this house was a new home and we were first time home buyers. Not only would be move into a brand new home, but the federal government would provide us with a tax credit.
The tax credit was for an amount of $7500 which must be repaid over 15 years. Basically this is an interest-free loan. Of course it is always a good idea to obtain an interest-free loan whenever possible. It is never pleasant to owe anybody anything, but having an interest-free loan with the federal government is the best deal possible for a loan.
2009 Tax Credit
The 2008 tax credit was a great deal at the time, but then 2009 rolled around and suddenly the first time home buyers in 2009 got an even sweeter deal. They were offered a tax credit of $8000 that does not have to be repaid.
This seems a bit unfair to the people who bought homes in 2008. However, in the grand scope of things, we are certainly not complaining.
Recently I had a conversation with a friend who became a first time home buyer in 2009 and he mentioned that he got the $8000 tax credit that does not have to be repaid. Then he mentioned to me that my tax credit had to be repaid and how glad he was that he waited until 2009 to buy his home. Of course I felt a bit awkward because of the discrepancy between us, though I was still happy for him, for his new home, and for his tax credit that did not have to be repaid.
Great Idea for New Home Buyers
Tax credits for first time home buyers were a great idea to help the United States get out of the Great Recession of 2008-2010. Many people were able to use the tax credit to be able to afford a new home, in part because it helps tremendously to know that you will receive a large tax refund in a few months which could be used to pay for new appliances or other materials for the home.
We are very thankful for the federal government for offering this tax break for us and our home. It certainly helped us move into our brand new home.
Federal First-time Home Buyer Tax Credit, official Web site
California Home Buyer Tax Credit, official Web site