Now is the time to buy a home if you are a first time home buyer...Why??? Here's why...
- Congress has created a $7500 tax credit for first time home buyers (which includes those who have not owned a home in the last 3 years). The credit is eligible for homes purchased before July 1, 2009.
- The tax credit (essentially an interest free loan) is 10% of the home's sales price with a maximum value of $7500.
- The income restrictions are for a single person the income can be no more than $75,000 and for individuals who file jointly, no more than $150,000.
- The home must be your principal residence.
- Only property bought within the United States is eligible.
- The purchaser who claims the credit will be required to pay it back over 15 years. The tax credit is a so called "refundable" credit and must be claimed on the individual's income tax return. The credit amount is repaid in increments of 6.67% of the credit amount over 15 years. There is no interest charge applied to outstanding balances.
- If you sell the home before the 15 year period of repayment is complete any profits will go towards paying back the loan. If you sell at a loss, the repayment is forgiven by the IRS.
- Ultimately, it's a good deal that any first time homebuyer in a position to buy a home should consider.
