This post is outdated, and this credit is no longer available… we leave it here in the event someone has a question about the Tax Credit they received – Eleanor.
The Housing and Economic Recovery Act of 2008 awards a tax credit up to $7500 on 2008 tax returns for qualifying first time homebuyers.
What is it? How does it work?
- This is a tax CREDIT, and not a tax DEDUCTION. It is a true dollar for dollar reduction on taxes owed. It is not issued at the time of purchase – so you still need a downpayment.
- The credit can result in a true tax REFUND! If, for example, you were to get back zero on your 2008 taxes and you qualify for the full $7500 credit, you would then recive a tax refund for $7500.
- The tax credit is essentially an interest-free loan. You will repay the credit to the government $500 per year over 15 years or when the house is sold.
- If the the profit you receive when selling your home is less than the remaining amount you owe, the discrepancy will be forgiven. For example, if $5000 was still owed and the sale of the home only generated $4000 profit, then the remaining $1000 shortfall would be forgiven and you would not have to repay the government.
- If you take the credit in 2008, the first $500 payment would need to be made when you file your 2010 tax return.
Do YOU Qualify?
- You must not have had ownership in a primary residence in the past three years.
- You must purchse a home between April 9, 2008 and July 1, 2009.
- Single taxpayers with an Adjusted Gross Income (AGI) up to $75,000 and married taxpayers with a joint AGI of up to $150,000 are eligible for the full $7500 credit. A lesser tax credit is still available if your income is above these amounts.
For more information or to get pre-qualified to buy a home, please call Steve and Eleanor Thorne, Connect With Us on Facebook