3 Disadvantages of First Time Home Buyer Grants

First time home buyer grants can be beneficial because they essentially give you free money that you can use for the down payment on your first home. While this can be nice, there are also some disadvantages that you should be aware of.

1. Lower Value Homes

One of the disadvantages of this type of grant is that it must be used on lower value homes in most cases. These grants are generally not for individuals that can afford to get higher-end homes. Therefore, you may find yourself buying a house that you do not really want.

2. Recapture Tax

If you get a first time home buyer grant, you might find yourself worried about recapture tax. Recapture tax is a tax that might be imposed by the government if you sell your house to quickly after getting this type of grant. This can add to the amount of taxes that you have to pay for that year.

3. Penalties

In addition to recapture tax, you may also have to pay a penalty for selling too quickly. You might have to pay this penalty back to the entity that gave you the first time home buyer grant. 

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