Tax Credit for First-Time Buyers
The new economic stimulus package changes the rules for tax credit for first-time home buyers.In 2008, Congress enacted a new law that gave first-time home buyers a maximum tax credit up to $7,500 on the purchase of a primary residence. Individuals with income below $75,0000 and married couples with income below $150,000 were eligible. The one catch is that the credit was actually a no-interest loan from the IRS that had to be repaid over a 15-year period.
In the new bill, the credit is raised to a maximum of $8,000 or 10 percent of the purchase price—whichever is lower—but the good news is that you no longer have to treat the credit as a loan. There is no repayment requirement. (But if you bought your first home in 2008 and claim the credit, it will still be treated as a no-interest loan that must be repaid.)
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