Article
Tax Credit
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HOUSING AND ECONOMIC
RECOVERY ACT OF 2008
First-time Homebuyer Tax Credit
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FEATURE
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H.R. 3221
Housing and Economic Recovery Act of 2008
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Amount of Credit
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Ten percent of cost of home, not to exceed $7500
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Eligible Property
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Any single-family residence (including condos, co-ops) that
will be used as a principal residence.
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Refundable
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Yes. Reduces income tax liability for the year of purchase.
Claimed on tax return for that tax year.
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Income Limit
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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).
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First-time Homebuyer Only
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Yes. Purchaser (and purchaser¿s spouse) may not have owned a
principal residence in 3 years previous to purchase.
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Recapture
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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.
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Impact on District
of Columbia Homebuyer Credit
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DC credit not available if purchaser uses this credit.
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Effective Date
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Purchases on or after April 9, 2008
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Termination
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July 1, 2009
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Interaction with Alternative Minimum Tax
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Can be used against AMT, so credit will not throw individual
into AMT.
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