In February, Congress passed and President Obama signed into law the American Recovery and Reinvestment Act, a bold investment package to create and save millions of jobs to help spur economic growth.  This landmark legislation includes a new $8,000 first-time home buyer tax credit to help stimulate the housing market.  This new tax credit is a great opportunity for first-time home buyers in El Paso and can help make home ownership a reality for many. 

This new $8,000 tax credit is only available until December 1, 2009, so it is important for potential home buyers to learn more about this new incentive to take full advantage of this opportunity.  This new $8,000 tax credit in the American Recovery and Reinvestment Act does not need to be repaid, and it applies only to first-time homebuyers and can only be used for principal residences.  The credit applies to purchases made between January 1 and December 1, 2009. 

This tax credit is subject to income limitations.  Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit.  The limit for married couples is $150,000.  Those who earn more than these thresholds my still be eligible for reduced tax credits.  The $8,000 is “refundable,” meaning that qualified buyers can still take advantage of it even if they have little or no tax liability to offset.  

Fortunately, El Paso’s housing market has not seen the same level of price declines as other parts of the country.  The swift passage of the American Recovery and Reinvestment Act and the ongoing expansion for Fort Bliss have helped mitigate further declines in our local economy.  This new tax credit for first-time home buyers will give our local economy a much-needed boost.

The American Recovery and Reinvestment Act also includes many other tax incentives and other benefits for individuals, and small businesses.  Consumers may also qualify for a tax deduction for State and local sales and excise taxes paid on the purchase of a qualified vehicle through 2010.  College students will also benefit from additional funding for Pell Grants and the College Work-Study Program.  Small businesses may also qualify for loans through the SBA’s financial assistance programs. 

This $8,000 tax credit will provide much needed assistance for families during this economic downturn.  It is important for people in the community to learn about this new tax credit before it expires.  If you know a friend or a family member who might be interested in buying a new home for the first time, be sure to tell them about this opportunity.  For more information on this and other tax incentives that you may qualify for under the American Recovery and Reinvestment Act, please visit my website at www.reyes.house.gov.  My staff is also available to help you on this or other issues and can be reached at 534-4400.