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Despite current tough economic times, if you're a first-time home owner, 2009 could still be your year!

Following nearly a three year slump, Decatur is seeing a significant jump in home sales, with first time sales leading the change.  This leap is attributed to the $8,000 tax credit, which is currently offered to new buyers.

Half of the local market sales are first time home buyers.  A recent J.D. Power and associates survey reported that new home buyers accounted for 44 percent of the market in 2008, compared to 56 percent of the market in 2009. 

The first time home buyers tax credit was introduced in 2008 as a part of President Barak Obama's stimulus package.  It offers an $8,000 tax credit to first time buyers that does not need to be repaid unless the home is sold within three years.  A new bill, recently introduced in the U.S. House of Representatives, aims to extend this tax credit through the end of 2010. 

The amount of tax credit depends on the cost of the new home - ten percent of the home's purchase price, with a maximum available credit of $8,000. 

Not everyone qualifies however.  If you're single and make $75,000 or more, or are married and make $150,000 or more, you do not qualify for the tax credit.  Conversely, if you think the credit doesn't apply to you because you're not a first time buyer, think again.  As long as its has been at least three years since you've owned a home, either jointly or independently, you qualify.

Generally considered more valuable than a tax deduction, a tax credit reduces the actual amount of tax owed, whereas a deduction only reduces the taxable income.  Say you owe $500 in taxes and you qualify for the $8000 tax credit.  Your $500 in taxes owed would be paid and you would receive a check for the remaining $7,500 to stimulate the economy as you see fit. 

To get into the action, however you need to close on a home by November 30, 2009. 

Eco-friendly, energy efficient home improvement also have the potential to earn big tax credits at the end of the year.  Living eco-friendly doesn't necessarily mean going completely "off the grid" as there are fairly simple things you can to to improve, conserve and save.

Earn up to $1500 in tax credit by simply installing anew energy efficient doors and windows.  A new energy efficient air conditioning system or hot water heater can earn up to 30 percent of the cost, to a maximum of $1500.

Major home improvement will earn bigger tax credits.  For example, install a solar-powered system or other renewable energy system to power your household appliances and hear your water and, in return, recover 30 percent of the cost in tax credit (there is no cap on what you can recover).  Most solar energy companies will offer a free evaluation of your home.  Weather you decided on a small or major energy efficient overhaul, you can still take advantage of the opportunity to get something back at tax time-while saving money and simultaneously reducing your carbon footprint. 

With the housing market's steady gains leading the way and new incentives for making eco-friendly choices, could this be a sign of better financial times to come? 

Written by Amy Sebeckis in the Decatur Magazine-October/November 2009 issue.