For would-be home owners who are finding it’s not as easy as it once was to buy a house , newly enacted legislation might just help. There is is now a ‘tax credit’ of as much as $7.5k for first-time buyers – but don’t wait too long because only homes purchased on or after April 9th 2008 and before July 1, 2009 will be eligible.
Under the new housing bill, home buyers (defined as those who have not owned a home in the last three years) will be eligible for a tax credit equal to 10 percent of the property up to a maximum of $7,500.
Hereâ€™s how it works:
- The credit is $3,750 for married couples filing separately. Unmarried people who jointly purchase a home will be able to divide the $7,500 credit.
- This program is actually a loan, which home buyers must repay over 15 years at zero percent interest beginning in the second year after they purchase the home. A home buyer who qualified for the whole credit would pay $500 for 15 years or about $41.67 per month.
- The credit applies only to homes purchased on or after April 9, 2008, and before July 1, 2009.
- High-income home buyers donâ€™t qualify: Eligibility begins phasing out for single filers with adjusted income of more than $75,000 and $150,000 for joint filers. It completely phases out at $95,000 for singles and $170,000 for married couples filing jointly.
See federalhousingtaxcredit.com for more info.
For a detailed analysis of the 2008 Housing Bill see this excellent independent report.