President Bush signed into law a monumental housing bill last week in an effort to support the struggling housing market. One of the provisions which should have an immediate impact on you first time buyers out there is a federal tax credit for first-time home buyers (defined as not having owned property in the last 3 years). Remember that a tax credit is the equivalent of cash-in-hand come tax season (as opposed to a tax deduction), so this is powerful news. Here are a couple highlights of that provision:
- Tax credit is equal to 10% of purchase price, or $7500, whichever is less
- Available to eligible home buyers purchasing between April 9, 2008 and June 30, 2009
- Tax credit amount must be repaid to federal government over subsequent 15 year period at rate of $500 per year
The tax credit will effectively increase a home buyers tax refund in the filing year following the home purchase. Though the credit does not provide you with cash needed to close, it could be a big help in terms of upgrading appliances, or making improvements.
The National Association of Home Builders has created a convenient website to learn more:
http://www.federalhousingtaxcredit.com/
This is an amazing opportunity, and if you have been thinking about Buying, now is the time. If you'd like more information, please let me know!!!
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