Tax Breaks for First-Time Home Buyers

The American Housing Rescue and Foreclosure Prevention Act of 2008 includes an important tax credit for first-time home buyers.

Palm Coast, Florida – August 18, 2008 – When congress recently passed the American Housing Rescue and Foreclosure Prevention Act, it threw in some additional benefits. First-time buyers who purchase a home between April 8, 2008 and July 1, 2009 are eligible for a tax credit up to $7,500. Unlike previous tax credits, this one is really a loan. You have to pay it back.
You qualify as a first-time buyer if you (and your spouse, if married) have not owned a principal residence for the three years before purchasing the home. The full credit is available to an individual with an adjusted gross income that does not exceed $75,000 ($150,000 if you file jointly). The credit phases out from $75,000 to $95,000 and $150,000 to $170,000 respectively.

The credit is really an interest free loan from the IRS. You get your credit on the return for the year in which you buy the home. Then you pay back $500 per year (beginning with the second year after the purchase) for the next 15 years.

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