$7,500 Tax Credit for First Time Home Buyers-Deadline Approaching 6/30/08
 

In July 2008, The Housing Rescue Bill was passed which included a $7,500 tax credit for first time home buyers. Here are some of the details:

How Much Is It?  

You can receive 10% of the purchase price of your home, capped at $7,500.

• 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.
• It's refundable, so if your tax liability is less than the credit, you can get the money back.

Who Can Use It?

First time home buyers (a buyer who has not owned a principal residence during the prior 3 year period). For married couples, both of you must be first-time home buyers. The home can also include townhouses and condos. 

How Does It Work?

Purchase your home between April 9, 2008 and before July 1, 2009. (If you build your house, the occupancy date must fall between those dates.) Claim the credit when you file your tax return.

Payback Terms

INTEREST FREE LOAN. The credit must be paid back evenly over 15 years ($500 per year for the full amount), beginning 2 years later. If you sell your home before the 15 years are up, you will owe the rest in the year of the sale from the capital gains on the home sale. If there are no gains on the sale, you will not have to repay the rest of the loan.

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