First Time Home Buyer $7500 Tax Credit or Interest Free Loan? How do you Interpret it?

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Real Estate Agent with Cummings & Co. Realtors 604121

From what I understand, the way the current bill/law reads is that the so-called $7500 tax credit for first time home buyers (that they can claim on their taxes when they file) is really merely a 15 year interest free loan from the government.  They can get the $7500, but they have to pay back $500 of it every year on their taxes for the next 15 years starting in 2010.

However, if the new bill that has been passed in the house and is going to the senate is passed (from what I understand) the repayment requirement will be wiped out and it will be a true TAX CREDIT!  If this is the case and you are a first time home buyer (IMO) you would be an absolute fool if you didn't take advantage of the government giving you $7500 just for buying a home!

IT WILL BE VERY INTERESTING TO SEE HOW THIS WHOLE THING PLAYS OUT! 

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Rainmaker
662,099
Patricia Aulson
BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH
Realtor - Portsmouth NH Homes-Hampton NH Homes

There are probably guidelines the buyers must adhere to. I would suggest that the buyers check with there accountant first to see what the ramifications are .

 

Portsmouth NH Real Estate

Jan 31, 2009 11:11 AM #1
Rainmaker
1,317,651
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

There are lots of restrictions -- and there have been various article and links here on AR, so one should check this out carefully.  There are some really benefits even thought it is a loan and not a credit.

Jan 31, 2009 11:14 AM #2
Rainmaker
803,667
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Michael, every time I read about this $7,500 tax credit, people are advertising it that way.  They are forgetting that the buyer has to repay this credit.  I would hope that they change this in the future, like you said, and just made it a straight credit for those who qualify.

Jan 31, 2009 07:07 PM #3
Rainmaker
2,397,721
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Those first time home buyers had better get buzy to take advantage of it.  Isn't it going away by April 15th?  Or at least you can't use it this year?

Jan 31, 2009 11:46 PM #4
Rainmaker
250,018
Mike Klijanowicz
Cummings & Co. Realtors - Perry Hall, MD
Associate Broker @ Cummings & Co. Realtors

I believe it is July 1, 2009 that they have to settle, but my guess is that hopefully they will extend that and make it a true credit eliminating the pay back requirement.  How in the world can you call something a tax CREDIT when you have to pay it back.  Wouldn't it be more appropriate to call it a tax DEBIT!

Feb 01, 2009 01:07 AM #5
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Rainmaker
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Mike Klijanowicz

Associate Broker @ Cummings & Co. Realtors
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