$8,000 Tax Credit Signed Into Law as Part of Stimulus Bill

First-time buyers will receive a tax credit of up to $8,000 for purchases made between January 1 - November 30, 2009. Unlike last year's tax credit, this is a true credit and will not require any payback. NAR has published a chart comparing differences in the 2008 and 2009 tax credits. In addition to the tax credit, the stimulus bill will also extend or expand all energy-related tax credits through 2010 (for items such as energy-efficient heating/AC units, doors, windows, insulation). Local governments will receive $2 billion to help purchase, rehab and then resell foreclosed houses in an effort to stabilize neighborhoods.

The National Association of REALTORS estimates that the tax credit could lead to 300,000 additional home sales. The ripple effect could generate $31 billion in incremental economic benefits, according to an article in Realty Times. NAR estimates that an average $62,000 of additional economic activity is generated for each house sold because it triggers other purchases such as furnishings, appliances, remodeling, moving expenses, etc.