On July 31st of 2008 President Bush past the Housing and Economic Recovery Act of 2008. One of the tax provisions I thought was great is a TAX CREDIT for 1st time home buyers. Please understand that a tax credit is much different than a tax deduction. A tax credit is applied directly to you as a credit in addition to a tax return or off of taxes you owe for that tax year. This is for a principal residence of a 1st time home buyers. My understanding is that a 1st time buyer is someone who has not owned a home in the past 3 years. Below are some of the details of this TAX PROVISION.
- Tax Credit for 1st time buyers
- Up to 10% of purchase price no greater than $7,500
- This is a NO INTEREST loan payed back over 15 years at $500 per tax year.
- Single income earners up to $75,000 per year phased out at $95,000.
- Married Income earners up to $150,000 per year phased out at $170,000.
- For homes purchased April 9th, 2008 through July 1st, 2009.
- If the home is sold and there is a balance left on the loan, it can be forgiven if the home value has not increased enough to cover the loan. So there is nothing to really worry about on the pay back.
- I personally think that all 1st time buyers should take advantage simply because this is a NO INTEREST loan. It can be used for the house, pay back yourself for down payment, closing costs, or simply put it in savings as a reserve fund.
Note: I am not a C.P.A. I pulled this information from valuable resources.
Phil White 480-430-3080
