First-time home buyers who buy or bought a home between Jan. 1 and Dec. 1 of this year are eligible for a tax credit of 10 percent of the value of the home — up to $8,000 — and they don’t have to pay it back.
That’s right. The government is giving money to those who invest in a residence for themselves and live there for at least three years.
“It’s an amazing opportunity,” Chris Montemurro, loan officer for Met Life Home Loans of Bangor, said on Monday. “It’s a great time to buy.”
With record low interest rates under 5 percent and a good number of homes on the market, now is the time to buy, he said.
To spur the economy, President Obama signed a $787 billion economic stimulus on Feb. 17, which includes the first-time home buyers tax credits. The credits are different from those offered under the Bush administration, which were $500 less and required repayment.
The 2009 tax credits will reduce the amount of income taxes owed or will result in a refund for those who owe less than the credit they receive.
First-time home buyers are defined as anyone who has not owned a home in the last three years. If the home is sold within three years of purchase, the entire amount of the credit is recaptured during the sale.
Local real estate agents Don and JoAnn Munson, who work together at ERA Dawson-Bradford, say customer calls have picked up since news about the tax credits have spread.
“I put two houses under contract last week,” JoAnn Munson said on Monday. “I haven’t done that in two months. I’m seeing an increase. It feels good.”
And Maine needs it. Single-family home sales statewide dropped by more than 22 percent between November 2007 and November 2008, according to data provided by the Maine Association of Realtors.
People are scared to make big purchases with the slumping economy, but with the incentives, they should at least research the possibilities, Montemurro said.
“They’re really afraid right now,” he said. “This is probably the perfect time to go looking. I just think it’s a great opportunity.”
Montemurro also said he believes “the government is going to keep [interest] rates down for us. If we can just hold onto our jobs, in the next year it will be much better.”
For those looking to buy a home, the tax credit is a windfall, said Don Munson.
“The payment does not have to be paid back,” he said. “Isn’t this a great country that we live in.”
BDN writer Abigail Curtis contributed to this article