Home > Strictly TAXES! > First-Time Homebuyers Tax Credit

First-Time Homebuyers Tax Credit

Buying Your First Home?
Take Advantage of the New Tax Credit
Now may be a good time to purchase a home, since there are alot of good deals awaiting those with a down payment to facilitate a purchase. Congress has come up with a novel way to help first-time homebuyers afford the down payment on a home.

For home purchases made after April 8, 2008 and before July 1, 2009, a first-time homebuyer can receive a refundable tax credit equal to 10% of the purchase price of the home. This credit is capped at $7500 ($3750 for married taxpayers filing separately).

But, before you get too excited, you should know that the credit is essentially an interest-free loan that must be paid back over a 15 year period. Payments will be made in the form of additional tax on the homeowner’s federal tax return for the next 15 years. If the home is sold or no longer used as a primary residence before the 15 year period, the balance of the credit must be repaid in the year that the home is no longer the taxpayer’s primary residence. However, the credit repayment amount cannot exceed the gain from the sale of the residence to an unrelated person, and no repayment is required in a year after the death of the taxpayer.

A first-time homebuyer is a taxpayer (or spouse if married) who had no present ownership interest in a principal residence in the U.S.A. during the 3-year period before the purchase of the home to which the credit applies.

This credit is phased out for individuals with incomes between $75,000 and $95,000. Married taxpayers filing a joint return are phased out with incomes between $150,000 and $170,000.

The credit is not allowed for nonresident alien taxpayers, homes that are financed with tax exempt mortgage bonds, or property purchased from a related party (relative). There are also special rules to deal with divorce, casualty losses, involuntary conversions, etc.

If you would like to take advantage of this opportunity and see how this credit will help your situation, E-File Florida is uniquely qualified. Not only can we handle the tax aspects of this scenario, but we can also help you as real estate agents and help you to qualify for a mortgage. Feel free to contact us at 954-583-8534 or visit our website at www.efileflorida.com.

Categories: Strictly TAXES!
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