In a previous blog, I mentioned the Homebuyer Tax Credit for first-time buyers which is included in the housing bill recently passed by Congress - the Housing and Economic Recovery Act of 2008.
To recap - the bill provides a credit of up to 10% or $7500 (whichever is less) for first-time home buyers. The "credit" is actually a loan which is paid back over 15 years in equal payments. If you sell your home before the credit is paid back in full, the balance is due at time of sale.
The credit applies to the purchase of a home made between April 9, 2008 and July 1, 2009.
Here are a few more details on this credit:
Residency - The home you buy must be your primary residence until you pay back the credit. So, if you’re thinking of buying and then renting out the property, you’ll have to pay the balance of the credit in the year that you first rent it out.
Repayment - Starts two years after the year in which the residence is purchased.
First-time homebuyer - According to the CCH Group (a tax advisory company), "a person is considered a ‘first-time homebuyer’ if he or she (or spouse) had no ownership interest in a principal residence during the three-year period before the new home is purchased."
Income Eligibility (based on adjusted gross income) - For married couples, you can receive the full tax credit if your income is less than $150,000/year. The credit is then phased out up to an income limit of $170,000. If you’re single, you can receive the full credit if your income is less than $75,000/year; the credit is then phased out up to a limit of $95,000/year.
Claiming the credit - The credit is claimed after you purchase the home, so it cannot be applied to your closing costs.
For more information on real estate in the Pittsburgh area, visit my web site at Pittsburgh Homes R Us.
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