One part of the recent Housing and Economic Recovery Act of 2008 is a $7,500.00 tax credit for first time home buyers who buy a home between April 9, 2008 and July 1, 2009. The government defines a first time home buyer has someone who has not owned a primary residence within the last three years. There are some income limitations as well. The tax credit is applied to the home buyer's federal tax liability (it's not a deduction) and possibly could create a refund for them.
Heres the clincher...the credit is actually an interest free loan that the home buyer will start paying back to the government in the 3rd year at a rate of $500.00 per year over a 15 year period. It's an economic stimulus plan to help home buyers in their first year of home ownership. It's not applied at closing so it cannot be used as a down payment or towards closing costs.
I don't believe this tax credit is for everyone. I think it will help people the most who have a higher federal tax liability such as business owners and commissioned sales people.
Scott Eaves, Associate Broker
(404) 518-3820 - DIRECT
(404) 920-3439 - FAX
www.scottsellsatlanta.com
Keller Williams Realty/Atlanta Classic
3800 Camp Creek Parkway
Suite 18-100 Atlanta, GA 30331
(404) 564-9500
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