The government is offering free money to new home buyers that have not owned a home in the last three years. The American Recovery and Reinvestment Act of 2009 provides up to $8000 in a tax credit to anyone that qualifies for the program. The amount received is determined by the value of the home (10 %) that is purchased.

This is free money. There was a similar measure put in place last year but that money had to be paid back to the government – albeit interest free. This new tax credit does NOT have to be paid back.

It is one way that the government is pushing to stimulate the economy and the struggling real estate industry. Those who are considering purchasing a new home in 2009 or expect to take possession of a home that they are building should talk with their financial advisor about the best path for taking advantage of this tax credit.

Home buyers may be eligible to revile 2008 tax returns in order to take advantage of the tax credit this year. Others may be able to adjust withholding in order to take advantage of the tax credit through out 2009.

Those considering the tax credit must purchase a home (or move into the home if building) after January 1, 2009 and before December 1, 2009.