Are you a first time home buyer? Have you taken advantage of the First Time Home Buyer Credit? If not you still have time. First time homebuyers are now eligible to receive a tax credit of up to $7,500 or 10% of the home’s purchase price. This is part of the Housing and Economic Recovery Act of 2008. The credit is available to purchasers who purchase their first home between April 9th, 2008 and July 1st, 2009. Married couples with incomes up to $150,000 and single taxpayers with incomes up to $75,000 are also eligible for the full credit. All others are eligible for a partial credit. This credit is essentially an interest free loan that must be repaid over 15 years. To take advantage of the credit, taxpayers must complete Form 5405. For more information, visit the IRS website or speak to your accountant. The IRS website is located at www.irs.gov.
This credit is very timely considering the current housing crisis; I hope that eligible taxpayers are able to take advantage of it. Although the credit is timely, I’ve heard many concerns or inquiries regarding its effectiveness. Many people are concerned that the length of eligibility is too short. Others are concerned that people can’t even afford to purchase a home. What are some of your thoughts?