Government First-Time Home Buyers Initiative

Hello Hampton Roads,

The government first-time home buyers’ initiative I am referring to is the “Federal Housing Tax Credit for First-Time Home Buyers.” This tax credit is part of the Housing and Recovery Act of 2008 which the President recently signed into law at the end of last month. It offers a fantastic opportunity for first time home buyers to purchase a home and receive up to $7500 as a credit on their taxes.

The tax credit is a dollar for dollar reduction in the amount of taxes owed and since the tax credit is refundable, this means it can be claimed even if the taxpayer has little or no income tax liability to offset. For example if a tax payer’s liability is $1500 and he or she qualifies for the full credit of $7500 then he or she would receive a check for $6,000! Though the tax credit must be re-paid over a 15 year period, it is essentially an interest free loan.

Note: The tax credit does have a time limit and is only valid for homes purchased from April 9, 2008 to June 30, 2009.

Other qualifications to claim this credit include the following:

• It is for first-time home buyers only. (A first-time home buyer is defined someone who has not purchased a residence during the 3 year period prior to their purchase.)

• It is for homes purchased as a primary residence only.

• Income qualifications for the full tax credit are up to $75,000 for single persons and up to $150,000 for married couples. Partial credits are phased out completely for single persons with incomes over $95,000 and married couples with incomes over $170,000.

• The credit must be re-paid without interest over 15 years or when the house is sold provided that there is sufficient capital gain from the sale. If there is not sufficient capital gain from the sale then the credit is forgiven. The repayment period begins 2 years after the credit is claimed.

Another benefit of this tax credit is that eligible first-time home buyers may purchase any home as a primary residence including regular re-sale homes or bank-owned homes encompassing both single family residences and townhouses/condos.

If you would like more information about this tax credit, or for more information about purchasing Hampton Roads real estate in general, please fee free to contact me.

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For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/