Posted by :
Keller Williams Realty
The government is now offering a $7500 tax credit to new homebuyers that Expires June 30, 2009!
This acts as a write off on your annual taxes and is interest free. Still, this is a loan and must be paid off within 15 years.
Who is eligible?
- First-time homebuyers or any homebuyers who have not owned a principal residence in the last three years
How does it work?
- Eligible purchasers can claim the $7,500 credit on their annual tax return form.
- Amount of credit: 10% of cost of home or a maximum of $7,500
- Two years after the credit is claimed, the homebuyer will have to start paying it back.
- 15 equal annual installments will have to be paid back to the IRS every year.
- 6.67% of the borrowed amount or a maximum of $502
- If home is sold before 15 years, the remainder of the loan will have to be repaid to the IRS upon the sale.
- Part of the liability can be forgiven if the gain on the sale is less than the amount of the loan.
- Home purchase time limit:
- Homes purchased on or after April 9, 2008 and before July 1, 2009
- Home must be a single family residence (including condos, coops) that will be used as a principal residence.
- Home must be located in the United States.
- Home cannot be financed through mortgage revenue bonds.
- Income restriction:
- To qualify for full $7,500 credit, the taxpayer must make no more than
$75,000 for single returns
$150,000 for joint returns
To still qualify for credit but at a lesser amount, the following income caps apply
$95,000 for single returns
$170,000 for joint returns
For more information on the tax credit:
Or if you would like to speak to a professinal...
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