First-time home buyers get treated differently by banks, the IRS and state agencies. That treatment typically translates into all sorts of goodies for anyone buying a house for the very first time. Whether it’s a tax credit, a lower interest rate, down payment assistance or something else, if this is your first venture into ownership, make sure you know what’s available.
The experts at Investopedia offer plenty of details about what first-time buyers can expect as they enter the real estate market in 2015. Keep in mind that tax laws and policies change frequently, so what might be offered today could be gone next month or next year. Always check with your real estate and financial professionals to stay on top of this topic.
Here’s a quick summary of what first-time buyers should know about special programs and tax breaks:
- According to most state and federal statutes, the definition of “first-time home buyer” is anyone (whether you or your spouse) who has not owned a primary residence for the past three years.
- Remember that tax credits and tax deductions are not the same. Credits directly reduce your tax bill, while deductions merely reduce your income, but indirectly lower your tax bill.
- One of the biggest advantages for first-time home buyers is the ability to use up to $10,000 from their IRA for down payments or closing costs. That’s a huge benefit when you consider that there are usually stiff tax penalties for taking money out of an IRA before retirement age.
Check with your financial professional to see if your state is one of the many that offers down payment assistance to first-time home buyers. To get the benefit, you will need to meet income requirements, and can only purchase properties that are priced under a pre-set maximum price.
The above are just a few of the many advantages of being a first-time home buyer. Don’t pass up the opportunity to take advantage of what’s out there. You could be looking at thousands of dollars in savings. Happy shopping!