One of the ways that the government is helping during the current economic crisis is through the $8,000 first time homebuyer credit initiative.
This is a tax credit and not a deduction, a distinction which has important implications. On an $8,000 deduction, a homebuyer (in the 35 percent tax bracket) would recover $2,800 in tax refunds. However, with this tax credit, the entire $8,000 is refunded.
Designed to stimulate the homebuyer market, this initiative will expire on Dec. 1. This means that there is only a month and a half remaining to take advantage of this credit (as a home purchase typically takes around 30 days).
“This is the most affordable market I have ever seen in my entire real estate career, both as a realtor and as an investor,” said Michelle Rubin, a Windermere real estate agent from Mercer Island. ♦
