If you are a first-time home buyer who has purchased or plans to purchase a home between the dates of April 8, 2008 to July 1, 2009, you are eligible for a tax credit of $7500. This is a wonderful opportunity. Essentially, the "tax credit" acts as an interest free loan that will have to be paid back to the government over a span of 15 years, which is $500 a year. But for those you who are on the edge of wanting to be a homeowner but are afraid to spend all of your savings on a down-payment, this tax credit can really help to make that a reality. Remember, this is not a tax deduction, it is a tax CREDIT, so if you owe $7500 in taxes for the year 2008, this credit would essentially wipe out that amount and you would pay no taxes for 2008. Another way to look at it is, if you owe no taxes for 2008, the government will give you $7500.
When I first heard about the tax credit, I didn't think it was such a big deal because you have to pay it back but who else will lend you money at zero percent interest and not expect you to pay it back for 15 years. This credit can really help those who need that extra money to comfortably get themselves into a home and pursue their dreams of becoming homeowners. You can put it in the bank for a rainy day and know you have several months of mortgage payments should the need arise. You can use it towards repairs and remodeling for the home you just bought.
****One other thing that you should know about is that you may never have to pay back the credit. Stay tuned as this would make a sweet deal even sweeter!!!
Check out the Internal Revenue Service or the Federal Housing Tax Credit page to learn more about the tax credit.
Are you a first time home buyer interested in Seattle properties?
Check out these Seattle homes for sale for under 450k.
