First-time home buyers have 7,500 reasons to buy a home now. The Housing and Economic Recovery Act of 2008 was signed by President George Bush on July 30th. One of the most exciting parts of the new bill is the provision for first-time home buyers. There is a $7,500 tax credit you can receive next year. Owe nothing on your tax return? You could get a check for $7,500.
How do you get the $7,500 credit?
Buy a home between April 9, 2008 and July 1, 2009 and you are eligible for the $7,500 tax credit. You have to be a first-time home buyer or haven't owned a principal residence in the three-year period prior to the new home purchase. Married couple? Neither spouse can have owned a home in the past three years to qualify.
Are there restrictions?
There is a maximum income for individuals. It is $95,000 in yearly earnings. There is a maximum for couples filing jointly. If your combined income is over $170,000, you won't qualify. (Sorry, you make too much. No tax credit for you.) Other restrictions just to keep us all honest and using the credit for what it was intended for. You have to buy a principle residence. It has to be located in the United States. That's about all the restrictions.
The tax credit is a great incentive to buy a home before next July, but the money is not completely free. It has a payback period. Think of it as an interest free loan. The credit has to repaid over the course of 15 years. You will be paying back about 6.67% per year. If you received the full credit of $7,500, you would be paying back about $500 per year.
This recovery act is still being deciphered by very knowledgeable people, but the $7,500 tax credit is really there. Buy a home and next year you can get up to a $7,500 check courtesy of Uncle Sam.
Want to learn more about the tax credit and the Housing and Economic Recovery Act? Read More.
If you are a first-time home buyer, there is no better reason - than these $7,500- to stop waiting and buy a home now.