Today, President Bush signed the recently-passed housing legislation (H.R. 3221) into law. This first-time homebuyer tax credit is now in effect. What does that mean for first-time homebuyers here in Louisville, Kentucky? I’m glad you asked!
|FEATURE||H.R. 3221 – Housing and Economic Recovery Act of 2008|
|Amount of Credit||Ten percent of cost of home, not to exceed|
|Eligible Property||Any single-family residence (including condos, coÂ]ops) that will be used as a principal residence.|
|Refundable||Yes. Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year.|
|Income Limit||Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000, respectively).|
|First-time Homebuyer Only||Yes. Purchaser (and purchaserâ€™s spouse) may not have owned a principal residence in 3 years previous to purchase.|
|Recapture||Yes. Portion (6.67 % of credit) to be repaid each year for 15 years. If home sold before 15 years, then remainder of credit recaptured on sale.|
|Impact on District of Columbia Homebuyer Credit||DC credit not available if purchaser uses this credit.|
|Effective Date||Purchases on or after April 9, 2008|
|Termination||July 1, 2009|
|Interaction with Alternative Minimum Tax||Can be used against AMT, so credit will not throw individual into AMT.|
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