New Housing Bill and Tax Credit |
Some critics of the new housing bill have opined that it is a "giveaway" to first time home buyers. Not exactly. It is an interest-free loan for 15 years.
Here's what I mean. Individuals who qualify for the $7500 tax credit (or 10% of purchase price, whichever is lower) will repay the amount over 15 years at $500 per year (if the maximum) amount. By the way, if the buyers' tax liability is less than the amount of credit, they will receive a check from the IRS for the balance.
If the buyers sell the home before the fifteen years is up, the balance of the interest-free loan is due and payable to the IRS. Even though the buyers are paying back 1/15 of the loan per year, if history is any indicator, those payments will be in dollars of less value than the original loan. Still not a bad deal.
The market is changing in every area, especially in those areas where change was most needed. Ask a local Realtor® for help in determining how you can benefit.
