$7,500 Tax Credit for First-Time Buyers

By: jennifer Mood: full of life Date: 01/31/2009 16:26:52 Music: None

If you don't already know first-time home buyers have the option to receive an interest-free loan of up to $7,500.00 in the form of income tax credit.  The credit equals 10% of a properties cost up to $7,500.00, and is applicable to single-family residences including condos and co-ops.  Property must be used as your primary residence.

The first-time home buyer is defined as those who have not owned a home for at least three years.  Here is how it works:

-The buyer will claim the tax credit the first year they file federal taxes and receive the money as a reduction of their federal tax liability. 

-The money must be repaid at the rate of 6.67% of the total credit each year for 15 years, making it an interest-free loan.

-If the property is sold before the 15-year pay-off, the balance of the credit is recaptured at resale.

-Income Limits: Individuals making $75,000 per year or less, or $150k for couples, receive full credit.  Amount phases out for higher incomes.

-Effective Date: From April 9, 2008 to June 30, 2009.

Hope this information clears up this credit and how it can benefit you or someone you know.

Jennifer Salkey