$7500 Tax Credit for first time home buyers

A new $7,500 tax credit for first time home buyers

Realtors and homebuyers will find some welcome news in recently enacted federal housing legislation: your first time home buyers can get a $7,500 tax credit. Congress intends for the credit to make housing more affordable. But hurry – the credit is only available for purchases before July 1, 2009.

Here’s how the tax credit works

There are income limits: $75,000 for single purchasers, $150,000 for couples.
The credit is not made to the buyer in the form of a check.
Instead, the credit is an itemized deduction on federal tax returns (your buyers should consult with their tax advisor).
It effectively reduces the purchase price by $7,500.
The credit is limited to first time buyers.
The credit must be repaid (at no interest) at the rate of $500 per year for 15 years.
However, if the home is sold, the seller will not repay more of the credit than they realized in profit.