Tax Credit for First-Time Home Buyers

[scfr]

If you are thinking of buying your first home (or have not owned a home for 3 years and are thinking of buying one), you may be interested in learning about a tax credit of up to $7,500 is being offered for first-time home buyers:

Federal Housing Tax Credit for First-Time Home Buyers: Home

Be sure to click on the FAQs section. It has loads of information.

A very interesting aspect of this "credit" is that it has to be paid back, at the rate of $500 per year ... so, what it really amounts to is a interest-free loan.

If I were a first-time home buyer, I would be happy to take an interest-free loan from the government!

But I'll admit that as a citizen & tax payer, I do wonder (with a bit of concern) what will happen if the people taking these credits default on the repayments the way that so many recently have defaulted on their mortgage payments.

[simpletron]

thanks for sharing this. I just bought my first home and I will take a 7500 interest free loan.

if people default on the loan then they will owe taxes to the IRS. just watch the penalties and interest roll in on back taxes.

what I found interesting was if you later sold the home and didn't get enough capital gains to pay off the loan then it is forgiven. people might try to abuse this because you could buy a home and then turn around and sell it for the same price just for the credit, or am I missing something.

[bankaround]

I think it's a good incentive, but don't use the tax credit as a sole reason why you should be buying a home. Some markets around the country are still falling at a rapid pace and the 7500 credit would be wiped out within a few months.

[Johansen8]

thanks for sharing..that was a good read ^____^