Texas real estate attorneys who practice residential real estate law in Texas will want to be sure to tell their clients about a new tax credit available to first time home buyers. As part of the Housing and Economic Recovery Act of 2008, first time home buyers get a credit against income taxes of 10% of the purchase price of the home, up to a cap of $7500.00. The credit applies to new or resold housing, and the full credit is available to single taxpayers with incomes up to $75,000.00 and married couples with incomes up to $150,000.00.
There is a partial credit available for single taxpayers with incomes between $75,000.00 and $95,000.00 and married taxpayers with incomes between $150,000.00 and $170,000.00. If the taxpayer does not have sufficient income to be able to use the full credit, they will receive a check for the balance. There is no special form; the credit is simply deducted on the taxpayers’ federal income tax return. Home buyers will be required to repay the credit to the government without interest over 15 years, or when they sell the house if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. The credit expires on June 30, 2009.
For additional details, go to: http://www.federalhousingtaxcredit.com/faq.php.