I was showing a first time home buyer a home on Monday and told her about the $7,500 tax credit available to First time home buyers if they purchase a home beteen 4/9/08 and 6/30/09. She was very excited to learn of this benefit. I thought I would write a little about this to provide people with a little information on the subject.
Basically, the qualifications are:
• The Buyer could not have own a home, as a primary residence, in the past 3 years to be considered a "First Time Home Buyer"
•Purchase date on the contract between 4/9/08 and 6/30/09
•Tax credit up to $7,500 for federal taxes. The Credit is taken when your file your taxes so it does not help you as you sit at the closing table, but definitely helps at tax time.
•Income restriction to receive the full $7,500 are an AGI of $75,000 if you file as single, and $150,000 for married couples
•Repayment is spread over 15 years at $500 a year interest free (almost like the second mortgage)
•Tax credit is repaid beginning 2 years after the credit is claimed. If you purchase a home in 2008, you would begin repaying the loan on your 2010 tax return.
•If home is sold before repayment is completed the remainder comes from the sale proceeds. If proceeds are insufficient to repay the tax credit, repayment is forgiven.
For more information please consult your tax advisor and see www.Federalhousingtaxcredit.com. The impact on the market will be interesting to watch. This seems similar to me to the second mortgages that are now much harder to get, the issue is it does not help at the closing table unless the Buyer adjusts their withholding and saves the money before closing. As a realtor, I am grateful because I do think this will help demand.
If you are thinking of buying a home, call the John Foster team at 770 722-7010. Johns sells homes in Cumming, Alpharetta, Suwannee, Johns Creek, and Duluth.
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