Expanded First-Time Homebuyer Credit Available

The Treasury Department on Wednesday announced the availability of an expanded tax credit for first-time home buyers as part of the Obama Administration’s affordability initiatives. The financial stimulus package — the American Recovery and Reinvestment Act of 2009 — includes a provision that will make up to $8,000 available to qualifying taxpayers that buy homes in 2009. “The expansion of the first-time home buyer tax break as part of the President’s recovery agenda gives money to taxpayers when they need it most, while also targeting an important group of buyers,” said Treasury secretary Tim Geithner. “We view our economic recovery plan, our financial stability plan and now this homeowner affordability plan as three legs of the same stool — an integrated whole that represents our immediate response to the current crisis.” The new law states that qualifying home buyers may claim up to $8,000 — or $4,000 for married individuals filing separately — on either their 2008 or 2009 tax returns. Unlike the previous law — which required recipients of the tax credit to repay the funds over a number of years without interest — the new homebuyer credit effective with the passage of the act does not have to be repaid. “First-time home buyers represent a significant portion of existing single-family home sales,” Treasury officials said in a media statement. “In 2008, nearly one out of every two homebuyers were buying for the first time, and the expansion in the first-time homebuyer credit will make it easier for first-time home buyers to enter the housing market this year.” Read the Treasury’s announcement. Write to Diana Golobay at [email protected].