Home Purchase Tax Credit for Buyers!
Congress passed a new bill last week, and if you’re buying a home and meet all of the following requirements, you’re in for a sweet deal:
1) You don’t own a home now, and have not owned a home in the last three years;
2) You closed on the home you’re buying after April 9, 2008, or, if you haven’t closed yet, you will close before June 30, 2009;
3) You are a U.S. Citizen or resident alien;
4) You did not finance the property using a tax-exempt bond mortgage; and
5) You are using the property you are buying as your primary residence.
If you meet all of these requirements, you can can claim a credit of up to 10 percent of your purchase price, up to $3,750 (or up to $7,500, if you are married filing taxes jointly), on your 2008 or 2009 taxes. If your adjusted gross income is over $75,000 (or $150,000 for married couples), then this tax credit begins to phase out.
There is a catch, however. You do need to repay the tax credit starting in the second tax year after you bought your home, making pro-rata repayments for up to 15 years. But the payments are not that much: for example, if you were eligible for the full $7500 credit, you would pay $500 a year for 15 years. That’s basically an interest-free loan! Moreover, if you sell the home at no profit, you don’t have to pay the balance you owe from the proceeds you get from the sale.
So if you’re looking to buy and meet all of the above requirements, get a move on! You can buy any home you want — house, condominium, townhouse, new, old, even if it’s falling apart and you need to fix it up yourself. It’s not often the government gives out interest-free loans!