Interest free tax credit is available to first time home buyers. What a great opportunity to help take advantage of falling home prices.
The Housing and Economic Recovery Act of 2008 contained a provision for a tax credit of up to $7,500 for first time home buyers. What makes this more interesting is a first time home buyer is defined as “a buyer who has not owned a principal residence during the three-year period prior to the purchase.” The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009, with the definition of purchase being the closing date.
There are income requirements, with single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualifying for the full tax credit. You may qualify for a partial tax credit if you are over these adjusted gross income limits.
Getting started with the tax credit program is simple; you claim the tax credit on your federal income tax return. The tax credit works like an interest-free loan and must be repaid over a 15-year period or when you sell the home, if there was a sufficient profit. The repayments do not begin until two years after the credit was claimed.
Remember, its interest free!