First time home buyers will find some welcome news in recently enacted federal housing legislation: you can get a $7,500 tax credit. Congress intends for the credit to make housing more affordable. But you need to hurry - the credit is only available for purchases before July 1, 2009.
Here's how the tax credit works
- There are income limits: $75,000 for single purchasers, $150,000 for couples.
- The credit is not made to the buyer in the form of a check.
- Instead, the credit is an itemized deduction on federal tax returns (your buyers should consult with their tax advisor).
- It effectively reduces the purchase price by $7,500.
- The credit is limited to first time buyers.
- The credit must be repaid (at no interest) at the rate of $500 per year for 15 years.
- However, if the home is sold, the seller will not repay more of the credit than they realized in profit.
As always, please contact me for any questions and recommendations for a lender that will have your best interest in mind.
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