First-Time Homebuyer Tax Credit
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The credit is available for homes purchased between April 9, 2008 and July 1, 2009.
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The credit amounts to 10% of the purchase price of the home not to exceed $7,500.
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A first-time homebuyer is defined as someone who has not owned a home in the last three years.
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Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
The tax credit works like an interest free loan and must be repaid over a 15 year period.
A homebuyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the
credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax
return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
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