I was surprised recently to discover that a lot of people still do not know about the free tax gift of as much as $8,000 that the Federal government is offering to first time home buyers.

            In general, here it is—it applies to the purchase of a primary home between January 1 and December 31, 2009. You (and your spouse) cannot have owned a home during the previous three years. You must meet certain income guidelines, $95,000 single or $170,000 couple, based on modified adjusted gross income. The tax rebate is 10% of the purchase price with a maximum of $8,000. If the home costs $70,000, the rebate is $7,000; if the home costs $100,000, the tax credit is only $8,000.

            The rebate remains a gift as long as you live in your new home for three years. If you sell the home within three years, you will have to re-pay the tax credit.

            There is also a tax credit for homes purchased between April 8, 2008 and December 31, 2008. But it has different guidelines and you should make sure you understand them.

            With this tremendous tax gift, mortgage interest rates at all-time lows, huge home inventories and falling price, this is an ideal time to buy a home.

            If you are in the market for a new home, this “perfect storm” of incentives will help you get the most value for your dollar.

Here is a link to more information about the tax credit—

http://www.federalhousingtaxcredit.com/2009/index.html

Here is a link to the IRS tax credit form—

http://www.irs.gov/pub/irs-pdf/f5405.pdf

You may want to consult a financial professional for additional information.

Be sure to visit my web site www.PensacolasBestHomes.com for more home buying information.