April 9, 2008 - January 1, 2009 - Frist Time Homebuyer Tax Credit White Paper

TAX CREDIT AS CREATED JULY 2008
APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008 - January 1, 2009

Amount of Credit
Lesser of 10 percent of cost of home or $7500

Eligible Property
Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.

Refundable
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.

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).

First-time Homebuyer Only
Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.

Revenue Bond Financing
No credit allowed if home financed with state/local bond funding.

Repayment
Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.

Recapture
If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.