Here’s one more reason to buy now, at least in the District: For first time buyers that settle on a purchase in DC before December 31, you may get a $5000 credit (not a deduction–an actual dollar for dollar offset on money owed!) on your Federal Taxes. That’s the same as Uncle Sam giving you $5000 of your hard earned money back just as a ‘thank you’ for buying in the District.
You may recall that the rule had expired in early 2006, but was approved during the final Congressional session of last year, and made retroactive to the delight of many 2006 buyers. It expires again at the end of 2007 (next month.) Even if you own a home somewhere else (including the D.C. suburbs), you can qualify for this tax break if the house you buy is the first one you own in D.C. In fact, you can qualify even if you have owned a home in D.C. before—as long as you have not been an owner for at least one year. There is, however, a phase out based on income limits: between $70,000 and $90,000 on single returns and between $110,000 and $130,000 on joint returns.
$5000 would make a nice Christmas bonus, no?