As part of the newly-passed Economic Stimulus Package signed into law by the President February 17, 2009, first-time homebuyers can now claim a tax credit worth $8,000 - or 10% of the home's value. The new credit is effective as of January 1, 2009 and will expire December 1, 2009.

The newly passed Bill replaces the $7500 tax credit that was passed by the Bush administration in July of 2008. That Bill required homebuyers to pay back the credit over 15 years. The new Bill eliminates the “payback” requirement and increases the credit to $8000. Also, the tax credit can now be used by homebuyers who purchased their homes using tax-exempt mortgage revenue bonds, such as the state’s CHFA mortgage program. CHFA mortgages were exempt from the original 2008 Bill.

The main difference between the 2008 and 2009 Bills:

1) Tax credit increased from $7500 to $8000

2) The tax credit now does not have to be paid back

3) The credit can now be used by those who purchased their home with a CHFA mortgage.

There are also income limit that apply, and we encourage you to talk to your tax advisor on this and any tax related issue.

It is important to note that first time homebuyers who purchased their home between April 8, 2008 and December 31, 2008 qualify for the original $7500 tax credit Bill and the provisions provided therein.

More information will be posted as it is made available through the IRS. Visit www.irs.gov for the latest and most detailed information.