| ||Opportunity of a lifetime for first-time buyers: $7,500 tax credit for first-time homebuyers. Applies only to homes purchased after April 9, 2008 and before July 1, 2009. Call the Clark Group at 800-611-5419 and request report ID #1051 for a FREE report on the Federal Housing Tax Credit for First-Time Home Buyers program.|
Unlike a tax deduction, this is a tax credit, meaning there is a dollar-for-dollar reduction in the amount of tax owed the IRS. Therefore, if a new buyer owes $7,500 in income taxes but also qualifies for the maximum credit, nothing will be owed to the IRS that year.
Since it is a tax credit, there is a payback provision, which is different from other tax credits in that this one must be repaid. Beginning in the second tax year following purchase, the full $7,500 credit is repaid at $500 each year over a 15 year period. If the home is sold and no profit is realized before the credit is repaid, the remaining balance is forgiven. If a profit is realized, the repayment cannot exceed the amount of the gain.
Does not apply to current homeowners.