Housing & Economic Recovery Act
August 1, 2008 by Carl Chapman
Lauren Rosin has been my Arizona mortgage broker for the past 4 years. She also takes care of Tonya Smith, one of our top producing agents. I asked Lauren about the Housing Bill and how it might affect buyers. Here is her response.
How does the $7,500 Tax Credit on Housing & Economic Recovery Act help you…and what is it?
The Government in an effort to stimulate the housing market has passed a law giving first-time home buyers a tax credit of 10% of the sales price, up to $7,500.
This is a tax credit, not a deduction. It reduces the home owner’s tax bill by up to $7,500 for the tax year they purchased the home. This is a one-time credit only.
At first this seems too good to be true, but here is the catch. The money has to be repaid over the next 15 years and repayment begins two years after you purchase your home. So basically the government is handing out interest-free loans. If you use the entire $7,500 tax credit your income bill will be increased by $500 for 15 years. If you sell the home prior to the 15 years then you have to pay back the Government the balance at the closing.
How do you qualify? The home has to be purchased between 4/9/2008 – 7/1/2009 and you have to be a first-time home buyer. If you have more questions please contact Lauren Rosin directly at 480-734-7064
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