Have you heard about the $7,500 home buyer tax "credit"? There has been a lot of talk lately about it and with the proposed changes in Congress, it could get even more confusing. Currently, if you purchased a home from April 1, 2008-June 30, 2009, you are eligible for this "credit". There are some stipulations, however:
1. You cannot have owned a home as your primary residence in the past 3 years.
2. You cannot make over $75,000/year if you file your taxes as an individual or $150,000 if filing jointly.
3. This "credit" is in fact a loan--interest-free from the government. It is payable over the next 15-years on your taxes each year in $500 increments. If you sell your house before then, you have to pay the remaining balance back on your next tax return.
That last one is a pretty big difference from just being "given" $7,500 in free money. You get the credit on the next year's tax return and begin paying the following year. It can be a great help to people, but also must be repaid and many people are not a fan of this program as a result. The upside, is it can dramatically help first-time homebuyers afford that first home in time, which may go down in history as one of the best times ever to buy a home.
Congress is tossing around some bills now that would double the credit to $15,000, eliminate the income restrictions, and the 3-year rule, as well as the re-payment requirement. Needless to say, this would be huge to homebuyers.
For more information visit: http://www.federalhousingtaxcredit.com/faq.php
As always, feel free to e-mail or call me with any questions. Good luck in your home search!!
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