The new housing bill provides a tax credit for home buyers who have not owned a home in the last three years. The tax credit is equal to 10 percent of the price of the property with a ceiling of $7,500.
- The credit is $3,750 for a single homeowner or for married couples who file separately. The credit is $7,500 for a married couple or two individuals who purchase a home together.
- The credit is a misnomer as it is actually a loan. The purchaser(s) must repay the loan over 15 years with no interest. The payments start during the second year after the purchase. A home buyer whose purchase price qualified him/her for the whole credit would pay $500 a year for 15 years which works out to be about $41.67 per month.
- The home must be purchased between April 9, 2008, and July 1, 2009.
- There is an income limit to this credit. An individual who files with an adjusted income of more than $75,000 does not qualify for the full amount. It is "pro-rated" up to an adjusted income of $95,000. The limit is 150,000 for joint filers and it completely phases out at an adjusted income of $170,000 for married couples filing jointly
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