First time home buyers get a tax credit up to $7,500 for buying a main home after April 8, 2008 and before July 1, 2009.  To be eligible, purchasers must not have owned a principal residence in the U.S.  in the previous three years.  Home buyers in 2009 can elect to take the credit on their 2008 income tax returns. 
Highlights 
  • First time homebuyers who purchase a principal residence between 4-9-08 and 7-1-09 qualify for the tax credit.  (It’s retroactive for buyers who have already closed—great reason to contact them and let them know about the new benefit.)
  • The maximum credit is $7500 OR 10% of the purchase price if lower than a $75,000 sales price.
  • If home is purchased in 2009, homebuyer can elect to amend 2008 tax returns and claim a tax credit.
  • Tax credit is “Recaptured” by the IRS, and REALLY an interest-free loan and paid back evenly over a 15-year time period.  For instance, a $7500 “credit” is paid back at $500 per year. Homebuyers skip a year before payments start.
  • Always advise your clients to check with an accountant to make sure this tax incentive truly works in their favor.
If you are a first time home buyer thinking about buying a home, we can give you some information on how you can take advantage of the great home purchase opportunities that exist right now.