Tax Credit Update for Home Buyers

$7500…$15,000…$8,000…

I didn’t write about the tax credit before because it seemed to change by the hour as to what it would finally look like.

Here is what is written in the full summary provided by the House Ways and Means Committee…

• The 10% tax loan with a maximum of $7500,  from last year,  will become an $8000 tax credit as of January 1, 2009.  So if you closed on a house in 2008, you have the tax loan which is repayable within 15 years, or upon sale of the home.
• Only homes purchased after January 1, 2009 are eligible for the $8,000 tax credit, but must be purchased before December 1, 2009.
• If the home is sold within three years of taking the tax credit, so during 2012, then the tax credit will be recaptured.  So if you buy a house this year, get relocated in two years, then you will need to repay some or all of that tax credit.  Sorry folks don’t know all the details about that.
• The income cap remains.  Individuals making under $75,000 and couples under $150,000 are eligible.
• It appears that the definition of home buyer is one that has not purchased a home within the past three years.

So that is the muddle that is the current tax credit.  If you have questions about whether or not you are eligible I would check in with a CPA.