The President hasn’t signed anything yet but….Because Congress appears to have reached an agreement on a $789 billion stimulus package for America and because the President is expected to sign it into law, the clock may be ticking for this year’s home buyers and homeowners.

The package contains two main benefits related to housing:

• The first provision is fairly well-known.  It gives first-time home buyers (a first time home buyer is defined as anyone who hasn’t owned a principal residence in the last three years) an $8,000 tax credit provided they purchase a home between January 1, 2009 and (I’ve heard all three) either June 30, August 31, 2009 or December 1, 2009.

Yesterday I read Aug. 31, today I read Dec. 1 and the Dispatch had end of June in a blub this morning. The good news for current buyers–go ahead and buy, you’re covered. If you bought last month, you’re OK too.

This is a true tax credit.  To reduce misuse and abuse, however, the $8,000 credit is contingent on home buyers holding property for at least 3 years.  If the home is sold in fewer than 3 years, the tax credit must be repaid to the government.  It’s also worth noting that the date range applies to closings and not sales agreements. 

• A second noteworthy feature in the package is that the stimulus package gives existing homeowners incentive to “green” their homes.  With available tax credits for energy-efficient windows and doors, furnaces and insulation, homeowners can claim larger tax deductions based on home improvement, up to $1,500.

But, just because the government provides housing-related tax benefits doesn’t mean you should act on them blindly. Tax liability is a highly individual item and you may be ineligible for any number of reasons–income limits?  Be sure to discuss your plans with a qualified accountant before committing to a plan.