The Housing and Economic Recovery Act of 2008 was signed today and that could mean you or someone you know may qualify for up to a $7,500 Refundable Tax Credit.
A simple overview of how it works
You are eligible if:
You are a first time home buyer (meaning neither you nor your spouse has owned a principal residence (home, townhouse, condo, etc.) in the last 3 years.
You purchase(d) a home "on or after April 9, 2008, and before July 1, 2009".
Your Modified Adjusted Gross Income is less than $150,000 (for married taxpayers) or less than $75,000 (for single or head of household filers) in the year the home was purchased. (If your Modified Adjusted Gross income is higher than those limits, you may still qualify for a partial credit.)
This gives the home buyer a Tax Credit, NOT a Tax Deduction.
A tax deduction reduces the amount being taxed by the deduction amount. A tax credit reduces the amount owed by the credit amount.
The fact that this is a refundable tax credit means that if you owe less than the credit amount, not only would you not have to send in the funds for those taxes, but the difference could be refunded to you (just like over-payments are refunded to you if you so choose). If you owe nothing, the entire credit could be refunded to you.
There are some additional exceptions for specific transactions, so make sure you check with your accountant and tax adviser before doing anything. They may also know of additional terms and conditions which could maximize the benefits of the Housing and Economic Recovery Act of 2008 which are not explained in detail in these blogs.
The intent of this article is simply to make you aware of an option you might not have been aware existed, and not to advise you to claim the credit or reject it. All financial decisions should be made in consideration of your specific circumstances and with the advice of your Attorney, Accountant, Tax Adviser and other legal and financial advisers.
If you are moving to the Salt Lake City area, make sure you get an Agent on YOUR side of the transaction!
If you have excellent credit and will be buying a $250,000-$750,000 home in the next 30-60 days and would like an agent who will work exclusively for you, call us at (801) 969-8989 or contact us via the link on this page.
©2008 Homebuyer Representation, Inc. "The Real Estate Agents on the Buyer's Side" ™ Exclusive Buyers Agents (EBA) - All Rights Reserved
Exclusive Buyer Brokerages do not list homes and never represent Sellers. Their agents represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...
©2008 Homebuyer Representation, Inc. - Salt Lake City, UT
Exclusive Buyers Agents (EBA) - All Rights Reserved
*There is much more to the Housing and Economic Recovery Act of 2008 than the $7,500 Tax Credit for First Time Home Buyers, to learn about other provisions of the Act, click here.