For The First Timers...

As we get closer to the end of the year, it's time to consider tax incentives for buying a home. If you are a first time buyer, you may be eligible for the first time buyer tax credit being offered by the federal government through July 1, 2009! If your income is $75,000 or less (double that if you're a married couple)and you bought a home after April 9th this year, don't let this credit pass you by when you're filing your tax return next year!

How it works:

If you're a first time buyer with a home purchase between April 9, 2008 and July 1, 2009, you may qualify (see income criteria above).

When you file your tax return, you'll get up to a $7500 refundable tax credit (you'll get less than that if the purchase price was under $75,000), as an interest-free loan from the government.

The tax credit is to be repaid over the course of 15 years, or earlier if you sell the home. If you don't have a capital gain on the sale of your home later, repayment of the loan is waived!

You don't have to begin repaying the loan until 2 years after the credit is claimed.

For example:

You bought a home in September 2008 and qualify for the tax credit. In early 2009 when you file your tax return, you will claim the $7500 credit on your tax return.

This means if, for example, you'd otherwise owe $1000 in taxes to the government, the first time buyer's credit will actually get you a $6500 REFUND!

In 2010, you'll begin repaying the government back at $500 per year for the next 15 years. If you sell the home before it's been fully repaid and don't have a capital gain on the sale, the rest of the loan repayment is forgiven.

Don't let this fantastic incentive pass you by if you're thinking of buying in the next year!