Homeowner rescue is relief on the way, but not a free ride 2008.Jul.29. Posted in Money
There’s relief on the way, but don’t expect a free ride. Though you might keep your house, you’ll pay one way or another.
By Bankrate.com
The housing rescue bill, soon to become law, is full of goodies and not-so-goodies for homeowners and those who aspire to be homeowners. Here are some highlights.
First-time homeowner tax credit
The law will extend a tax credit of up to $7,500 to first-time homebuyers. A first-time homebuyer is defined as someone who hasn’t owned a home in three years.
The tax credit is for 10% of the purchase price, up to $7,500, but phases out for higher-income homeowners. Homeowners are eligible for the tax credit if they bought after April 8 of this year or buy before next July 1.
This is a tax credit, not a deduction. It reduces the homeowners’ tax bill by up to $7,500 for the tax year in which the purchase was made. If you buy a house this year, you get the tax credit for the 2008 tax year — the one with a filing deadline of April 15, 2009. If you buy a house next year by the end of June, you get the tax credit for the 2009 tax year. It’s a one-time credit; you don’t get to keep taking it year after year.
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