Tax credit offered to new homebuyers Expires June 30, 2009! 

  1. Who is eligible?
    • First-time homebuyers or any homebuyers who have not owned a principal residence in the last three years
  2. How does it work?
    • Eligible purchasers can claim the $7,500 credit on their annual tax return form.

·         Amount of credit: 10% of cost of home or a maximum of $7,500

  1. Repayment:
    • Two years after the credit is claimed, the homebuyer will have to start paying it back.
    • 15 equal annual installments will have to be paid back to the IRS every year.

·         6.67% of the borrowed amount or a maximum of $502

  1.  
    • If home is sold before 15 years, the remainder of the loan will have to be repaid to the IRS upon the sale.

·         Part of the liability can be forgiven if the gain on the sale is less than the amount of the loan.

  1. Restrictions:
    • Home purchase time limit:

·         Homes purchased on or after April 9, 2008 and before July 1, 2009

  1.  
    • Home must be a single family residence (including condos, coops) that will be used as a principal residence.
    • Home must be located in the United States.
    • Home cannot be financed through mortgage revenue bonds.
    • Income restriction:

·         To qualify for full $7,500 credit, the taxpayer must make no more than

a.       $75,000 for single returns

b.      $150,000 for joint returns·        

To still qualify for credit but at a lesser amount, the following income caps apply

a.       $95,000 for single returns

b.      $170,000 for joint returns 

For more information on the tax credit call:

Elisha Gutloff

919-672-2394