The $7500 Tax Credit for first time home buyers authorized by The Housing and Recovery Act of 2008 will expire on July 1, 2009.
A first time home buyer (as defined by the IRS) is:
Neither spouse can have owned a primary residence in the last 36 months. This can include Homes, Townhouses, Condos, Mobile Homes and House Boats.
Income phaseouts to qualify for the entire amount are $75,000 for single filers and $150,000 for married filing joint. Partial credits are available up to $95,000 for single and $170,000 for married.
The home is purchased between April 9, 2008 and July 1, 2009
The tax credit is just that, a credit against the taxes owed the IRS not to exceed $7500. Basically it's an interest free loan. After the credit is claimed, beginning 2 years later your federal tax refund will be reduced by $500 per year for 15 years.
If you sell the house within the next 15 years, you must pay back the balance owed from the gain on the sale of the home. If the home is sold at a loss, the debt is canceled.
Always count the cost before committing. Check out all of the financing options before locking in on a specific mortgage. In essence, this is an interest free loan that has to be paid back.
You can find out more information by visiting http://www.federalhousingtaxcredit.com/
No comments:
Post a Comment