First-Time Buyer Tax Credit Provisions

Are you or someone you know a first-time homebuyer? Thanks to this year's Housing and Economic Recovery Act, when you purchase a home you may qualify to receive a tax credit of up to $7500. The credit expires in June 2009; another reason why right now is the best time to be a buyer!

Are you or someone you know a first-time homebuyer? Thanks to this year’s Housing and Economic Recovery Act, when you purchase a home you may qualify to receive a tax credit of up to $7500. The credit expires in June 2009; another reason why right now is the best time to be a buyer!

Feature	Housing and Economic Recovery Act of 2008 (H.R. 3221)
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 year.
Income Limit	Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 as 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 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.
Interaction with Alternative Minimum Tax	Can be used against AMT, so credit will not throw individual into AMT.
Effective Date	Purchases on or after April 9, 2008
Termination	June 30, 2009

About the Author

Sheila Lawrenson has written 12 articles on Bellevue Real Estate Information.

Sheila Lawrenson is an Associate Broker and a member of the International President’s Circle with Coldwell Banker Bain in Bellevue, WA. Sheila has 23+ years experience marketing and selling fine homes, waterfront properties, new construction, vintage homes and Downtown condominiums. She has served as Assistant Manager in the #1 Coldwell Banker Bain Affiliate Office World Wide and looks forward to assisting you in obtaining your Real Estate Goals. You can reach her at (425) 241-9400 or Sheila@LawrensonHomes.com.