Today, President Bush signed the recently-passed housing legislation (H.R. 3221) into a law. The new first-time homebuyer tax credit goes into effect immediately. This credit is intended to convert prospective buyers into new Homeowners. This will be of great benefit to Realtors, their clients and to communities.
The chart presented below outlines the basic features of the new credit. The Research Department is also preparing a brochure that REALTORS® can provide their clients. The guidelines here will help Realtors guide their Clients through these new provisions.
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Amount of Credit
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Ten percent of cost of home, not to exceed
$7500
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Eligible Property
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Any single‐family residence (including condos, co‐ops) that will be used as a principal residence.
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Refundable
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Yes. Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year.
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Income Limit
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Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000, respectively).
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First‐time Homebuyer Only
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Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase.
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Recapture
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Yes. Portion (6.67 % of credit) to be repaid each year for 15 years. If home sold before 15 years, then remainder of credit recaptured on sale.
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Impact on District of Columbia Homebuyer Credit
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DC credit not available if purchaser uses this credit.
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Effective Date
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Purchases on or after April 9, 2008
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Termination
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July 1, 2009
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Interaction with Alternative Minimum Tax
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Can be used against AMT, so credit will not throw individual into AMT.
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Properties for Sale and Rent in Miami Florida, Kendall and Doral- Dadeland areas Specialist, Maria Borci PA, ABR,TRC,ASP C (305) 798-0706
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