First Time Home buyer stimulus

In response to the sub prime crisis which has crippled the US as well as world economy, the federal government has come up with different responses that have been fairly successful in encouraging the home buyer to go ahead with his purchase. The biggest and best target that the government has in mind has been the first time home buyer, most of whom have been postponing their plans to purchase their dream home, due to recession and also expecting the markets to lower real estate rates.

Of the various programs introduced, the stimulus in the form of tax credits has been most promising in terms of result achieved. The tax stimulus has been aimed at making the home more affordable to the common man, considering the fact that most citizens always have dreamt of purchasing their own house. The latest version of the tax credit package, which is designed for the period of 209 has in it, different advantages to facilitate easier purchase.

To start with, the policy aims at giving tax credits to any first time home buyer, who purchases a home in the period starting from 1st January 2009 to 31st December 2009.  The upper limit for the tax credit is 00 and is calculated as ten percent of the value of the home purchased. This is a very useful advantage as this helps the citizen to save on his taxes, apart from using that amount to invest in other interest earning mechanisms. Another important reason that a person would want to use this policy is the fact that the interest rates have touched a bottom level and the government is making all efforts to keep the rates at that level for some time to come. The government is also assisting in down payments by either reducing the down payments required or by way of financial assistance. The criterion to be eligible as a first time home buyer is that the person should not have made any property purchases in the last three years.

The only catch as far utilizing this package is that the salary of the buyer should not exceed 000 for a single buyer or 0000 for a joint buyer. This is infact a good condition as such a step would help the government and real estate companies tap into the hitherto untouched middle class and upper middle class segment of the population.

Real estate has always been considered as a strong driver of the economy and hence all steps taken by the government to stabilize the real estate market and generate good returns shall, on the long run, translate into a better and strong economy.