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Housing and Economic Recovery Act of 2008
First-time Homebuyer Tax Credit
You may have heard about the First-time Homebuyer Tax Credit that is
part of the Housing and Economic Recovery Act of 2008.
Below are the highlights of the credit and how it may apply to you.
Even if you are not considering a purchase at this time, you may know someone
who is thinking of buying a home in the near future - so please pass along this
information.
I also have available "Frequently Asked Questions" about the tax credit from the
National Association of Realtors, which provides additional details. Feel free to contact me to receive
your copy.
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FEATURE |
H.R. 3221
Housing and Economic Recovery Act of 2008 |
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Amount of Credit |
Ten percent of
cost of home, not to exceed $7500 |
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Eligible Property |
Any
single-family residence (including condos, co-ops) that will be used
as a principal residence |
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Refundable |
Yes. Reduces
income tax liability for the year of purchase. Claimed on tax return
for that tax year |
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Income Limit |
Yes. Full
amount of credit available for individuals with adjusted gross
income of no more than $75,000 ($150,000 on a joint return). Phases
out above those caps ($95,000 and $170,000, respectively) |
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First-time Homebuyer Only |
Yes. Purchaser
(and purchaser's spouse) may not have owned a principal residence in
3 years previous to purchase |
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Recapture |
Yes. Portion
(6.67 % of credit) to be repaid each year for 15 years. If home sold
before 15 years, then remainder of credit recaptured on sale |
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Effective Date |
Purchases on
or after April 9, 2008 |
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Termination |
July 1, 2009 |
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Interaction with Alternative Minimum Tax |
Can be used
against AMT, so credit will not throw individual into AMT |
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Member, National Association of Realtors
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