Tax Credit / No interest loan from the IRS for 1st time home buyers, another reason to buy now!
Could you use this money to fix up the home you are planning to buy?
Basically, first time home owners will now get a fully refundable Federal tax credit (actually an interest free loan) in certain circumstances. Their definition of a first time homebuyer is a taxpayer who did not have an ownership interest in a principal residence in the
Taxpayers who meet the above two requirements will receive a refundable tax credit on their personal taxes filed for the year in question. This tax credit will be 10% of the purchase price of the home with a maximum tax credit of $7,500. This tax credit will phase out for single taxpayers who make between $75,000 and $95,000; meaning those who have an adjusted gross income (AGI) of less then $75,000 get the full tax credit, those who have an AGI above $95,000 get no tax credit, and those in between get a partial tax credit. Married filers phase out between $150,000 and $170,000.
If you read the bill more in depth, this is out like an interest free loan from the Internal Revenue Service.
The tax credit must be paid back to the IRS ratably over fifteen years with no interest charge beginning in the second taxable year after the taxable year in which the home was purchased. Also, if the home is sold before the loan is paid back, the loan is due in full the next tax year.
