$7500 First Time Homeowner Tax Credit

By
Real Estate Agent with Keyes Company Realtors

The $7500 tax credit is available for first-time homebuyers only. The law defines a first-time homebuyer as a buyer who has not owned a home during the past 3 years. All US citizens who file taxes are eligible to participate in the program. First - time home buyers would receive a $7500 tax credit for the purchase of any home on or after April 9, 2008 and before July 1, 2009. To qualify the home buyer must actually close on the sale of the home during this period.

 This credit is a refundable credit meaning that if you pay less than $7500 in federal income taxes, then the government will write you a check for the difference. For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $2,500 payment from the government. If you are due to receive a $1,000 tax refund from the government, your refund would grow to $8,500 ($1,000 plus $7,500 from the homebuyer tax credit). Buyers can take the tax credit on their 2008 or 2009 tax return. If you purchased the home in 2008, the tax credit is taken on your 2008 tax return. If you buy in 2009, you have the option of taking the credit on your 2008 or 2009 tax return.

 All homes, whether single-family, town homes or condominium apartments will qualify, provided the home will be used as a principal residence and the buyer has not owned a home in the prior three years. This also includes newly constructed homes.

 The tax credit essentially serves as an interest free loan to be paid back over 15 years. For example, a home buyer claiming a $7,500 credit would repay the credit at $502.00 per year. However, the buyer does not have to start re-paying the credit until two years after the tax year in which the credit is claimed. If the homeowner sold the home, then the remaining credit would be due from the profit of the sale of the home. If there was insufficient profit, then the remaining credit payback would be forgiven.

 Home buyers who file as single or head-of-household taxpayers can claim the full $7,500 credit if their modified adjusted gross income (MAGI) is less than $75,000. Between $75,000 and $95,000 they are eligible for a partial tax credit. Married couples who earn between $150,000 and $170,000 are eligible to receive a partial tax credit.  The credit is not available for single taxpayers whose MAGI is greater than $95,000 and married couples with a MAGI that exceeds $170,000

Comments (20)

Bill Kennedy
Keller Williams Realty - Greenville, SC
Homes For Sale Greenville SC

I just wanted to welcome you to active rain! This is a great site, and has been profitable for me.  In a year, I've personally received clients and referrals that have exceeded over thirty thousand in gross commissions - directly attributable to this site!  I tell you that to help keep you blogging.  It's free - there's no better price!  Blog about all sorts of stuff, not just real estate.  People are checking out your blog to learn about you, and what makes you tick.  That's how you score clients off of here.  Be real, and blog often.  Most of all have fun!

If you ever need a good agent down in South Carolina, let me know!

Aug 25, 2008 02:00 PM
Kevin Wood,
Keller Williams Southern Arizona - Tucson, AZ
Tucson, AZ Realtor

Teddy,

Thank you for sharing your perspective. I wish you the best of luck with your future blogging. This is an awesome place to learn and grow

Aug 25, 2008 02:21 PM
Vicente A. Martinez
Prudential Douglas Elliman Licensed Real Estate Salesperson - Woodhaven, NY
Realtor, Brooklyn - Long Island - Queens Homes

Hi Teddy and welcome to active|rain. There are thousands of tips, tools, and tricks of the trade here. Be sure to check them out. Best of luck and see you around.

Aug 25, 2008 02:38 PM
Keith Elliott Jr
KEIRE Realty Group - Manassas, VA
Principal Broker/Owner

Hello Teddy,

Welcome to Active Rain and congrats on your first post! The opportunities to learn and network are incredible here. Best of luck to ya!

-Keith

Aug 25, 2008 03:57 PM
Marcy Fedalei
Keller Williams Realty - Spartanburg, SC

May I be one of the first to welcome you to Active Rain - a great place to share ideas, thoughts and perspectives. Enjoy!

Aug 25, 2008 10:10 PM
Ron Martin
Keller Williams Realty - Spartanburg, SC
Ron Martin Team

Welcome to Active Rain, It's a great site to share idea's, receive free marketing, Enjoy and have fun!

Aug 26, 2008 12:35 AM
Yvette Gardner
Keller Williams Realty, Spartanburg, SC - Spartanburg, SC

Welcome to the Active Rain community. You have chosen a great site with tons of information you can learn from.  Have fun with it and hope to see more of your blogs soon!

Aug 26, 2008 12:39 AM
Kirk Westervelt
Van West Realty - Greenville, SC Realtor -Short Sale Expert! - Greenville, SC
Kirk Westervelt, Broker In Charge, Van West Realty - CDPE - Short Sale Agent - Home for Sale - Greenville, Simpsonvil...

Hi, welcome to Active Rain! I hope to see more of your blogs in the future. Learn from others, share your knowledge and experiences and enjoy yourself! Take care! ---Kirk.

Aug 26, 2008 12:59 AM
Connie Rice
Keller Williams Greenville Central - Simpsonville, SC
Connie Rice & Partners - Greenville, SC Real Estat

Welcome to the rain! You've joined a great place to network, make and meet new friends and discuss lots of interesting topics. I see you are already off to a great start! Stop by if you get a chance. I would love to hear your feedback on our thoughts! Well, have great time and ENJOY. Look forward to seeing you around.

Aug 26, 2008 01:29 AM
Ginger Ryals
Prudential C Dan Joyner and Young Realtors - Spartanburg, SC

Welcome to Active Rain!! This is a great site to network and share ideas!! Have fun with it!!

Aug 26, 2008 03:30 AM
Nate Blankenship - Spartanburg, SC Realtor
Keller Williams Realty - Spartanburg, SC

Welcome to Active Rain! This is a great site to network, learn and share ideas with others. Have a great day!

Nate

Aug 26, 2008 05:26 AM
Jean Terry
Keller Williams Realty Spartanburg, S.C. - Spartanburg, SC

Hi, and welcome to Active Rain, a great site to network,learn and share.

Good Luck...

Aug 26, 2008 07:02 AM
Benjamin Clark
Homebuyer Representation, Inc. - Salt Lake City, UT
Buyer's Agent - Certified Negotiation Expert

Welcome to Active Rain! For some tips on how to get started here, check out my blog entry at ActiveRain Fast-Start Tips for Quick and Easy Points
Happy blogging and good luck!

Aug 26, 2008 05:19 PM
Lorena Westervelt
Van West Realty - Greenville, SC
Co-Founder/Co-Owner

Hello, welcome to Active Rain! This seems like a wonderful environment to network as well as learn from others. I hope you enjoy yourself and participate often in the Active Rain environment!

Aug 27, 2008 12:14 AM
Steve Vennemann-Hennepin-Dakota-Anoka contract for deed property-Ramsey-MN
BoardWalk Premier Realty INC - White Bear Lake, MN

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On behalf Http://www.mnlakeplace.com   we are happy you became a member of action rain and we wanted to welcome you to action rain. It is a very good site to learn and network.

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Aug 27, 2008 01:47 AM
Lori Isaacson
Credit Restoration Consultants - Plantation, FL

Hi Teddy,

On behalf of Credit Restoration Consultants and the 106,200 plus members of ActiveRain, I wish to welcome you to the network.  Should you ever have a question as it relates to bad credit, credit repair, credit restoration, or identity theft, please do not hesitate to contact me.

 Best wishes,

Lori Isaacson

Aug 27, 2008 02:18 AM
Peg Gilliland
Charlottesville Solutions - Charlottesville, VA
Broker, GRI, CDPE

I see that you are new to Active Rain and I just wanted to welcome you. I hope that you enjoy it as much as I do and that you find it a great resource.

Aug 27, 2008 08:58 AM
Rick Sergison
EXP Realty of Canada Inc., Brokerage - Pickering, ON
Durham Region Real Estate Blog

I just stopped by to welcome you to Active Rain. I hope that you find it a great benefit to your business and that you see the value that I have also found here. I am from Charlottesville Virginia and using Active Rain has really increased my business!

My main blog on Active Rain is here: Charlottesville Real Estate Blog, not the link at the bottom of this post. 

I hope you will look into the many groups as there are some great group both local and broad based,.... 

enjoy!

Aug 27, 2008 09:13 AM
Todd Clark
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

What great information you are giving your potential clients with this post, I hope it gets some of those first time home buyers off the fence and out looking and buying.

Welcome to the rain,

Todd Clark, Helping Families Home - www.IFoundYourNewHome.com

Aug 28, 2008 04:33 AM