Did you know that if you are an American buying your first home between April 9, 2008 and July 1, 2009, the U.S. government will give you up to $7,500 in the form of a federal tax credit?
Update: New legislation in 2009 has expanded upon the initial $7,500 tax credit. Although there is valuable information here for people who purchased homes in 2008; anybody buying in 2009 may also want to read about the $8,000 tax credit and how to claim this credit.
The tax credit is part of recently-enacted legislation to help the nation recover from the recent mortgage crisis. Basically, the first-time home buyer tax credit is designed to keep Americans buying homes. Not so much for our sake, but for the sakes of builders, real estate agents, and mortgage lenders who earn their livelihood from home sales.
Still, this tax credit, along with soft real estate prices, make it an excellent time to buy a first home.
How does the tax credit work?
The tax credit is basically an interest-free government loan of 10% of your home purchase price, to a maximum of $7,500, to help defer the initial costs of buying your first home.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 can get the full tax credit, and taxpayers with higher incomes may be eligible for a partial credit.
Taxpayers can claim the credit on their federal tax returns for the year in which the home was purchased. The taxpayers will then repay the credit over the subsequent 15 years of tax returns, interest free.
For more information, the National Association of Home Builders provides some consumer information about the tax credit.
Ready to go house-hunting? Save time, money, and aggravation by lining up your financing first with a mortgage pre-approval. Read my post on how to get no-obligation mortgage quotes online.
Need to file your taxes? Did you know you can prepare your federal income tax return online and for FREE with TurboTax? Learn more about TurboTax Online Federal Free Edition »
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