Tuesday, August 12, 2008

Tax Credit????

Know Some 1st Time Homebuyers???

It is time to talk with them about buying a house. Though the lingo and the means to get the new $7500 tax credit is still fuzzy, it looks to be a great opportunity for 1st time buyers that plan to stay in their house for a few years.

If you haven't heard it is a bit unusual of a tax credit: you have to pay it back in over 15 years. You pay 6.67% of the "tax credit" back each year. Thus,
if you are a 1st time homeowner that buys a home from April 2008 to July 1, 2009, you get that tax credit on your 2008/2009 taxes and begin paying back in the following tax year. It's interest free!!!

Should you decide to sell the house after living there for 5 years, yikes!! If you make money on the sale, you will owe the remainder of the tax credit. IF you bought poorly and lose money on the sale you can have the payment "forgiven". No word on the impact of the "forgiven" money. Yes there are details to work out!!!

Before you get real excited about the Tax Credit, talk with your accountant!!!
Get a Realtor on your side....you don't want to think you get the credit and you won't or buy that house that will lose value. Wouldn't it be smarter to have a house that after 5 years goes up $40,000 and you just pay the Federal Govt for the tax credit you owe and take the rest of the money and run???

More news later?? Questions are welcomed!! Opinions???
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