Team Furmage Homes - Real Estate Professionals in Fayetteville, North Carolina

New Tax Credit Amounts To a Free Loan up to $7,500

Home-purchase tax credit created by the new housing bill.
Up to a $7,500 credit on federal taxes for 2008 or 2009 ($3,750 a single person).
Functions like an interest-free loan. Only the principal is paid back over time.
Eligibility time is from April 9, 2008, through June 30, 2009.
May not have owned a house during the past three years
Must close before the end of next June
Credit for of up to 10 percent of the purchase price of the property, (up to $7,500).
If adjusted gross income exceeds $150,000 ($75,000 if single), credit reduces.
Must use the house as their principal residence.
Those eligible simply request the credit on their tax return for 2008 or 2009

An example: An eligible buyer this year that owes the IRS $4,000 on their total 2008 income tax bill, could receive $7,500 tax credit and wipe out everything they owe plus get them a $3,500 refund. The new tax credit is what the government calls "refundable": If their tax bill is less than the credit amount, they get the difference back.

Payback starts the second tax year after purchase and continues for up to 15 years.
Payback period for the full $7,500 credit would be $500 a year.
If the house is sold before the end of the repayment period with no gain on the sale, then no further payback is expected from the proceeds.
If there is a net gain, the "recapture" cannot exceed the amount of the gain.

For more information go to the website: www.federalhousingtaxcredit.com or give us a call at (910) 988-0947 or (910) 977-5366