The First Time Home Buyer's Tax Credit is a credit equal to the lesser of 10% of the homes value or $7,500. The tax credit is available to all first time home buyers who buy their home between April 8th, 2008 and July 1, 2009.
How does it work?
This is actually a tax CREDIT and not a tax deduction. So, if you usually receive a refund every year from Uncle Sam, you will now receive an additional $7,500 on top of what ever you typically receive. Likewise, if you usually have to write a check to Uncle Sam, you'll be able to make that check out for $7,500 less.
This is actually a tax CREDIT and not a tax deduction. So, if you usually receive a refund every year from Uncle Sam, you will now receive an additional $7,500 on top of what ever you typically receive. Likewise, if you usually have to write a check to Uncle Sam, you'll be able to make that check out for $7,500 less.
Are there any catches?
Of course! This tax credit works like an interest free loan and must be repaid over a 15 year period. Keep in mind though, a "typical" $7,500 loan would have $4,200 in interest that you will save. (assuming a 7% interest rate)
Are there any income limitations?
This is only available to single tax payers with incomes up to $75,000 and married couples with incomes up to $150,000.
What is a First Time Buyer?
The definition is a buyer who has not owned a PRINCIPAL residence in the past 3 years. So if you sold your home in 2005 or prior, you are a first time buyer. Owning an investment or vacation home that is not your principal residence does not diqualify you. If you're married, and either you or your spouse has owned a principal residence then you are both disqualified.
Does a manufactored home qualify?
If the home is your primary residence, then yes! This also includes townhouse, condos and house boats.
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