What does a person have to do to get the 7500.00 tax credit that Bush put into order. Do you have to be a first time homeowner or can anyone buy a house and does it hae to be a foreclosure? Thanks for any help as I am not clear on this matter.
It is only for first time homebuyers that are purchasing a single family dwelling. The amount of credit is 10% of the cost of the home, not to exceed $7,500. It is claimed on the tax return of the year of the purchase of the home. It also has an income limit of no more than $75,000 or $150,000 joint income.
Here are some more details about the tax credit
- Can only be used by first time homebuyer who is purchasing a primary residence.
- Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps at 95,000 and $170,000, respectively.
- The credit is recaptured. 6.67 % of credit will be repaid each year for 15 years. If home sold before 15 years, then remainder of credit recaptured on sale.
- Applies to purchases closed betwen April 9, 2008 and July 1, 2009
The “tax credit” isn’t really a tax credit, instead, it is really just a tax free and interest free loan with some qualifications. You have to start paying back this loan within two years and you make equal payments over 15 years. When you sell your home, any profits will go first into paying off that loan. If you sell at a loss, the difference will be forgiven… meaning you will not owe any money on the loan (though it should be recorded as income as is typical with most loan forgiveness agreements, so you will owe taxes on it).
Are you sure that it is for owner occupied Single Family dwellings? I thought that owner occupied Multi-family dwellings are also qualified.
JP
The tax credit is for purchasing as a primary residence. Two to four unit properties qualify for owner occupied primary residence financing as long as the buyer occupies one of the units as his primary residence.