First Time Homebuyer Tax Credit/Refund; Are You Eligible?
August 31st, 2008 Categories: Mortgage and Loans, Real Estate News, Real Estate Trends, Sacramento Home Buyers, Sacramento Real Estate
We may start to see families and employers lending money to first time buyers for down payment Money; to be paid back after the buyers do their taxes…
You see; as part of the the recent Housing and Economic Recovery Act of 2008, all first time home buyers who purchase a home after July 9,2008 and before July 1, 2009 are eligible for up to 7,500 in tax rebate money-
Anyone who has not bought a home for the last three years is eligible!
This is not so much a tax credit as it is an actual rebate; except it has to be paid back; so it’s like an interest free loan.
Here’s the rules:The credit will be equal to 10% of the purchase price of your home but can not be more than $7,500. You will be able to subtract the amount of the credit from your tax liability, increasing your refund or reducing the taxes you owe. For example, if you were to file your ‘normal’ tax return to find that you owe $2,000 in taxes; with the credit, your tax are lowered by $7,500—which means, you would get a $5,500 REFUND!
So, what’s with the loan part of the deal? The tax credit is really a loan; two years after the credit is claimed, you start repaying at a rate so that you will have paid the credit back in full over the course of 15 years. So for those who get the full credit, the pay back amount is $500 per year. For those getting less than the full credit, you pay equally over the 15 years. But it’s interest free!
