I have had several people ask me about the new “tax credit” for home buyers so I went to the experts at BeachFleischman and ask Jennifer Nordstrom for the details.
“There is a new refundable federal tax credit allowed for the purchase of a principal residence. The credit is the lesser of $7,500 or 10% of the home’s purchase price. This credit provides a dollar-for-dollar reduction in federal income tax or alternative minimum tax. The credit is authorized by the Housing Assistance Tax Act of 2008, and applies to houses purchased before July 1, 2009.
To qualify for the full $7,500 credit:
- You must have not owned a principle residence in the last 3 years
- The purchase price of your home must be $75,000 or more
- Your adjusted gross income must be $75,000 or less ($150,000 for joint filers)
A partial credit is available for taxpayers with income greater than $75,000 and less than $95,000 ($150,000 and $170,000 for joint filers).
If the homebuyer purchases the residence between January 1 and June 30, 2009, the homebuyer can elect to treat the purchase as made on December 31, 2008. By making this election, the taxpayer will be able to claim the credit on their 2008 tax return.
The credit must be REPAID over 15 years with no interest charge beginning in the year 2010. However, if the home is sold before the 15-year period ends, the remaining credit must be recaptured in the year of the sale.”
For more information please consult with your tax advisor or call Jennifer Nordstrom at BeachFleischman (520) 618-1239.
Your Real Estate Expert,
Renée
