Archive for the 'Tax Credit' Category

First-time home buyers who purchase homes from January-09 thru November-09 may be eligible for a tax credit.  This credit is equivalent to 10% of the purchase price of the home, although it’s capped at $8,000.  Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.  This replaces the Senate’s proposed $15,000 tax credit to all buyers (not just first time buyers).  It is not retroactive to borrowers who fell under the previous $7,500 tax credit that had to be re-paid over 15 years.  Finally, it appears that this latest and final revision took out the exemption for buyers who use housing bond programs like VHFA.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.  Those earning more than these thresholds may be eligible for reduced credits.  Buyers will also have to repay the credit if they sell their homes within three years.

To learn more about this tax credit, go to http://www.federalhousingtaxcredit.com/.