There is a tax credit for first time home buyers. Under the new housing bill, home buyers who have not owned a home in the last three years will be eligible for a tax credit equal to 10 percent of the purchase price up to a maximum of $7,500.
Here’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 don’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.
There you have it. It’s not a gift, but a loan. Still, it might help some first time home buyers get into their home, and as Martha Stewart often said before her incarceration, “That’s a good thing.”
Last Updated on August 8, 2008 by Chuck Marunde
This is perfect timing, I just closed on my house at the end of September. Loan or not, still glad to have it!
Good article, and thanks for your blog. I am a regular reader, so please keep posting.
What about the people that brought there house in January 2008 I feel that it is unfair because I am a single panrent and once brought my house my job went down and I have been fighting to keep the house and this credit would have put me back where I was and now they are saying from April 2008. I feel that it should start at the being of the year!
Good point Christy. In fact, in turns out that very few people are taking advantage of this program according to a recent article in the Seattle Times. People are finding the program has too many conditions, and you have to pay back the money anyway. Leave it up to our government, or our politicians, to come up with what they think are really great ideas when the ideas are actually nothing more than bureaucratic nonsense. Or to put it another way, the government is saying, “We’re here to help you, and we will give you lots of money, but then you have to give it back. Aren’t we nice?”