First Time Home Buyer Credit
Added to the latest bill passed aiming at amending the proposed $15000 Tax Credit, which is designed to designate the same to first time home buyers, the Housing and Economic Recovery Act of 2008, otherwise known as First Time Home Buyer Credit, is also designed to giving emphasis and benefit on those people having been purchased their homes for the first time. It says that once you qualify as a first time home buyer, you are then granted a new tax credit, which is refundable. However, it must be noted that the same is applicable only to those who purchased the same and have lived and considered the same as their principal residence in the United States. But the same must be within the period from April 9, 2008 up to days before the expiration of July 1, 2009.
The first thing that you should know is of course the meaning of first time home buyer. Are you a first time home buyer? Well, should you be one who may or may not be married, and who never had an interest in the previously explained principal residence within the period ending on the date of purchase, that is must be comprised within the ambit of the three year - period.
However, the aforementioned meaning does not work in absoluteness, it admits of series of exceptions. Hence, even if you qualify in the umbrella of being a first time home buyer, yet you are once qualified for the program known as the District of Columbia First Time Homebuyer Credit for the year you purchased the same, then you cannot be considered as the ones mentioned in the above - mentioned definition. The second instance is that when you are a non - resident alien, as such you are not granted with the same privilege given to citizens of United States. Third is that should you be sponsored by the proceeds of a revenue bond which is known as a tax - exempt one, as such you disqualify as a first time home buyer. And the last is that you cease to be a tax payer of said place, since you used to be a taxpayer of said principal residence. However, the same is applicable within the allowable period, which is before the end of the taxable year.
How is it done?
As to the process on how to avail of this First Time Home Buyer Credit, you have to take a close look. Once you qualify, you are then automatically permitted with a particular credit against your income tax as of the year of purchase.
The subject credit herein is an amount equal to 10% of the actual purchase price of said home, which is nevertheless treated as a principal residence. However, the same should not exceed an amount of $7,500. Another amount is granted to married individuals as well, that is of different rate.
Does it need to be repaid?
Yes. In this First Time Home Buyer Credit, however, the same is only repayable on the period after 15 years following the date of granting the said full credit. But what is great here is that it is different from the previous tax credit grants insofar as interests and surcharges are concerned. This one is considered as an interest - free loan.
