The Kestner Team

As part of the “Housing and Economic Recovery Act of 2008” that was recently signed into law, Congress has created a new, temporary federal income tax credit to provide an incentive for first-time homebuyers.  This tax credit is an interest-free loan that enables consumers to receive a tax credit on a dollar-for-dollar basis on their personal income tax return in the calendar year following the year of closing on their home. They begin paying the tax credit back the year after that and make equal installments during the next 15 years.

Below is a quick reference chart that summarizes this new tax credit.  You can also Click Here for a Frequently Asked Questions Document from the National Association of Realtors regarding this new tax credit.

You can click here for more information about this new tax credit program.

HOUSING AND ECONOMIC RECOVERY ACT OF 2008       First-time Homebuyer Tax Credit

FEATURE

H.R. 3221

Housing and Economic Recovery Act of 2008

Amount of Credit

Ten percent of cost of home, not to exceed

$7500

Eligible Property

Any single-family residence (including condos, co-ops) that will be used as a principal residence.

Refundable

Yes. Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year.

Income Limit

Yes. 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 ($95,000 and $170,000, respectively).

First-time Homebuyer Only

Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.

Recapture

Yes. Portion (6.67 % of credit) to be repaid each year for 15 years. If home sold before 15 years, then remainder of credit recaptured on sale.

Impact on District of Columbia Homebuyer Credit

DC credit not available if purchaser uses this credit.

Effective Date

Purchases on or after April 9, 2008

Termination

July 1, 2009

Interaction with Alternative Minimum Tax

Can be used against AMT, so credit will not throw individual into AMT.

Posted by Nina Kestner McIver on August 21st, 2008 6:01 PMPost a Comment (0)
Recent Posts:
Archive:
My Favorite Blogs:
Sites That Link to This Blog:

Nina Kestner McIver Coldwell Banker Barnes 114 Cool Springs Blvd. Franklin, TN 37067
Phone:

Contact Us | Free Home Valuation | Services | Nashville, TN Rankings | For Rent | Our Blog

Copyright © 2012 Nina Kestner McIver
Portions Copyright © 2012 a la mode, inc.
Another XSite by a la mode, inc. | Admin Login| Terms of Use| Site Map
All rate, payment, and area information are estimates and approximations only.