Tax Credit Up To $7,500 For First-Time Buyers Before July 1
If you’re thinking of buying your first home in 2009, doing so early this year could qualify you to take a first-time-buyer tax credit of up to $7,500 (or up to $3,750 for married filing separately). The credit is available to qualified buyers who purchase a principal residence on or after April 9, 2008 but before July 1, 2009.
Qualified buyers are those who have not owned a principal residence during the three years prior to the purchase closing/settlement date. The full credit is available to married joint-filers with Modified Adjusted Gross Income (MAGI) up to $150,000, and to single filers with MAGI up to $75,000. The credit is phased out and disappears completely for MAGIs more than $170,000 (joint filers) or $95,000 (single filers).
The credit works like an interest-free loan, since it must be repaid to the government over a 15-year period in equal installments (or in full when the home is sold or ceases to be used as a principal residence and there is sufficient gain). The first payment is due two years after the credit is claimed. The amount of the credit is limited to 10% of the purchase price of the home, but no more than $7,500 or $3,750, depending on filing status.