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$7500 First time homebuyer tax credit

 

UPDATE NOV. 5, 2009: Read this for information about the newly extended and expanded $8,000 home buyer tax credit

As part of the recent housing stimulus package enacted by Congress at the end of July, there is now a $7500 tax credit available for first time homebuyers.  This is a great incentive but is only available for a purchase occuring between April 9, 2008 and June 30, 2009.

Since it is a tax credit (not a tax "deduction"), it is a substantial reduction of a buyer's tax bill.  It is basically like getting an additional $7500 refund from your taxes.

One caveat, though, is that it is actually more of an interest free loan than a straight tax credit.  The $7500 is repayable by the buyer to the government over 15 years at about $500 per year.  Still, this should help a lot of buyers in terms of cash flow in the first year or two after purchase.  After coming out of pocket for the down payment and closing costs, it is nice to get an extra $7500 off your tax bill.  Of course, there are income limits as well and is phased out for those above $75,000 in income (single) and $150,000 (married).

 For more details, please read the F.A.Q. below:

Click here for many common questions and answers about the homebuyer tax credit

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Comments

Hello we bought our house in 2009 and got this tax credit, now 3 1/2 years later we are wanting to sell, once we sell our house will we have to repay that loan right away or do we continue to pay it back out of our taxes? Thanks for the info
Posted @ Friday, January 20, 2012 6:56 PM by Amber
I sold my home in May 2012 and bought it in August 2008. I had the $7500 tax credit and to this point I have repaid $1000. I took a loss on the sale as I bought it for $94,000 and sold for $75,000. I know that I do not have to repay what I owe left because of the loss, however my question is can I file to get the $1000 I already paid back? 
 
Thanks
Posted @ Saturday, January 19, 2013 1:11 PM by John
The cost of real estate property has keep on rising & falling as the global economy reacted as well. There's always change and it definitely hurts consumer in general.
Posted @ Wednesday, August 28, 2013 12:55 AM by George @ home insurance
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