Home Buying in 43410>Question Details

Angela Burro…, Home Buyer in 43410

I heard something on the radio the other day about a $7500.00 tax credit for first time home buyers that you

Asked by Angela Burroughs, 43410 Fri Aug 15, 2008

dont have to pay back unless you sell your house within the first fifteen years.Does anybody know anything about that or how you go about getting it?

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4
Angela,

Check out the reference website below. This should answer your questions, etc.

Good luck.

Art Hotes ~ RE/MAX Classic
0 votes Thank Flag Link Fri Aug 15, 2008
The other answers you received are correct. This is called the Economic Recovery Act of 2008. To give a boost to first-time buyers who have been sitting on the fence, the government is offering a significant financial incentive to explore the opportunities available in today's housing market.

This program does have income limits. Single or head-of-household filers can claim the full $7,500 credit if their adjusted gross income is less than $75,000. For married couples filing a joint return, the income limit doubles to $150,000. Please let me know if you need further information on this subject.
0 votes Thank Flag Link Fri Aug 15, 2008
Hello Angela. You have to pay back the $7,500 tax credit in $500 annual installments. The only time you don't have to pay the whole amount back is if you sell the house and the proceeds from the sale are not enough to pay the whole remaining loan/credit amount back. For instance, if you sell the house after two years and your proceeds from the sale are only $5000, you'll have a $6,500 loan amount left after 2 years, and you have to use the $5,000 proceeds to pay towards the $6,500 and then the $1,500 that you can't pay will be forgiven. Below is a link to a site that provides more info concerning the details for the tax credit (# 16 deals with the forgiveness in the event that there's insufficient sales proceeds). I hope this helps.
0 votes Thank Flag Link Fri Aug 15, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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You have to pay it back $500 / year. If you sell before you have paid back all of the $7500 then you must pay the remaining balance. For example, you get the $7500 credit when you file your income tax, because you bought a house. Next year when you file your tax you have to pay back $500, so if your income tax refund would normally be $1500 now you will only get $1000 because you paid back $500 that year. If you sell the house the following year, you will owe $7000, because that is the remaining balance.

Maybe confusing, but nothing is free, it's a loan
0 votes Thank Flag Link Fri Aug 15, 2008
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