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.
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.
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