This morning I was thinking about the Housing and Economic Recovery Act recently passed and it got me to thinking about when Lee and I bought our first home. We had been renting the first few years of our marriage in a suburb of Pittsburgh and we really couldn’t wait to own our own home. It was Lee’s VA eligibility that allowed us to even consider buying a home. I don’t remember how many homes we had looked at but when we found the one on Leon Drive it was perfect for us. With its 2 bedrooms and a bath upstairs – living room, dining room and kitchen on the main – we were so excited! There even was an unfinished basement where our washer & dryer was. Now anyone that’s renting or has rented knows what a joy and relief it is to be able to do your laundry without hauling it to the laundry mat! It even sat on ¼ acre mature lot that made Lee smile… what a very special time that was…
So let’s look at this tax credit that's available to any one that hasn’t owned a home in the past 3 years. You must be a 
U.S. citizens (of course you have to file taxes since it’s a tax credit). AND you must close on the property between April 9, 2008 and June 30, 2009.
There are some incredible benefits available to first time homebuyers. The amount of the tax credit is up to 10% of the qualified home purchase price up to a $7,500 maximum.
Now there are some income limits but they are fairly lenient ($75,000 adjusted gross income for an individual and $150,000 for couples filing jointly.) There’s even a partial credit if you make a tad more than that.
Remember the tax credit is refundable. Which means that the credit will reduce your income tax liability for the year you bought your home. Now here’s the real whammy – the credit can be claimed even if you have little or no federal income tax to pay! Meaning that if the amount of taxes you owe is less than this tax credit you’ll get a check back from the government for the portion or even all of the amount of the tax credit. Now the credit does carry a payback provision - $500 per year via your tax returns. But you don’t have to start repayments until two years after you took your credit.
What happens if you want to sell your home? The remaining credit would be due from the profit of the sale of the home. IF there is insufficient profit from the sale then the remaining credit payback would be forgiven!
I hope this helps explain the Housing and Economic Recovery Act Tax Credit. But you have to act NOW – so please tell every first time homebuyer you know… This is really worth using for someone that’s ready to buy their 1st home…and it is too good to miss out! It’s a $7,500 tax CREDIT.
Call us if you have any questions or just want to get started on finding your 1st home here in the Raleigh area! It’s what we love to do…
Raleigh Realtor – Pamela St. Peter
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