First Time Home Buyers Get $7500 Tax Credit

Posted Tuesday, November 11, 2008, at 6:06 PM

If you are a first time home buyer and you bought or buy a house between April 9,2008 and July 1 2009 then you are eligible to receive a $7500 tax credit. This is part of the Housing and Economic Recovery Act of 2008. This is a tax credit which means it directly reduces what you owe or is added to what you get back. There are income limitations that gradually reduce the tax credit for higher incomes. For a full credit the income limit is $75,000 single and $150,000 married.

The CATCH? It has to be paid back... I know. After two years of the tax credit being issued it has to be paid back at $500 per year for 15 years. This is at 0% interest. If you sell before it is paid back then the remaining balance will be due in full. If you lose money when you sell then it is waived.

What is the benefit? Use this credit rather than a high interest credit card to buy something for the house, pay off other debts, or invest it. The money is at (0%) interest so put it into savings and earn a little money. Heck, prepay the mortgage on your new house. The interst you save on that could be worth the $500 a year. Just a thought to pass on to those first timers out there.

NAR Tax Credit Information

As a licensed agent I am required to disclose company info: ERA Bicknell and Parker Realty and Auction, Inc. 931-684-8700

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Thanks Kenneth, We are 1st time home owners. We haven't heard of this. Sounds good. So the 500 each year we pay it back right to them or will it come out of what we get back each year after filing our taxes. I have kinda re did my name but I am the rebelrose

-- Posted by heaven8kids7grandrebelrose on Tue, Nov 11, 2008, at 6:53 PM

Sorry heaven8kids7grandrebelrose,

I have been out of pocket. It is to be paid back with your taxes. This link will take you to the IRS page that explains it.

http://www.irs.gov/newsroom/article/0,,i...

-- Posted by KParker on Mon, Nov 17, 2008, at 5:47 PM