Here is some very helpful information about the new Housing and Economic Recovery Act of 2008. This is from the National Association of Realtors, and can be viewed on their website: http://www.realtor.org/GAPublic.nsf/files/chart_homebuyer_tax_credit_.pdf/$FILE/chart_homebuyer_tax_credit_.pdf
This is such a great time to be a homebuyer-- they bargains are plentiful, and those beautiful homes in mint condition are priced really well too. Interest rates remain historically very low, and special programs exist in communities to assist with downpayment and closing costs. Talking to your Realtor is the best first step to understanding the opportunities in today's market.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
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First‐time Homebuyer Tax Credit FEATURE |
H.R. 3221 Housing and Economic Recovery Act of 2008
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Amount of Credit |
Ten percent of cost of home, not to exceed $7500
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Eligible Property |
Any single‐family residence (including condos, co‐ops) that will be used as a principal residence.
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Refundable |
Yes. Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year.
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Income Limit |
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 |
Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.
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Recapture |
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 |
Purchases on or after April 9, 2008
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Termination |
July 1, 2009
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Interaction with Alternative Minimum Tax |
Can be used against AMT, so credit will not throw individual into AMT. |
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