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The Housing and Economic Recovery Act of 2008
The President has signed a major housing bill considered to be the most significant housing legislation in decades. So what does this mean to you?
If you are a first-tme homebuyer, you may receive up to a $7,500 Tax Credit for the purchase of any home. The Tax Credit can be used for a home sale closing on or after April 9, 2008 and before July 1, 2009.
Who is Eligible?
Start enjoying the benefits of home ownership today.
To find out if you qualify for this Tax Credit, click here.
The $7,500 tax credit is available for first-time homebuyers only.
The law defines a first-time homebuyer as a buyer who has not owned a home during the past three years.
All U.S. citizens who file taxes are eligible to participate in the program.
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What Types of Homes Qualify for this Tax Credit?
Whether you're looking for a Single-Family home, a Townhome or a Condominium, K. Hovnanian Homes has the home that's right for you.
To learn if you qualify for the full Tax Credit, click here.
All homes, whether single-family, townhomes or condominiums will qualify.
However, there are several conditions:
- The home must be used as a principal residence, and
- The buyer has not owned a home in the prior three years.
- The Tax Credit includes newly-constructed homes.
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Does Qualifying Depend on My Income or Filing Status?
Your tax-filling status as well as your income can influence the amount you qualify for.
To learn if you qualify for the full Tax Credit, click here.
Home buyers who file as single or head-of-household taxpayers can claim the full $7,500 credit if their adjusted gross income (AGI) is less than $75,000.
For married couples filing a joint return, the income limit doubles to $150,000.
Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time homebuyer tax credit.
Married couples filing jointly who earn between $150,000 and $170,000 are eligible to receive a partial first-time homebuyer tax credit.
The credit is not available for single taxpayers whose AGI is greater than $95,000 and married couples filing jointly with an AGI that exceeds $170,000.
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Effective Dates for the Tax Credit
First-time homebuyers would receive up to a $7,500 Tax Credit for the purchase of any home on or after April 9, 2008 and before July 1, 2009. To qualify, you must actually close on the sales of the home during this period.
Is the Tax Credit Refundable?
To learn more about filing your taxes in regards to this tax credit, click here
A refundable credit means that if you pay less than $7,500 in federal income taxes, then the government will write you a check for the difference.
- For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $2,500 payment from the government. - If you are due to receive a $1,000 tax refund from the government, your refund would grow to $8,500 ($1,000 plus $7,500 from the homebuyer tax credit).
If you purchased the home in 2008, the tax credit is taken on your 2008 tax return. If you buy in 2009, you have the option of taking the credit on your 2008 or 2009 tax returns.
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Payback Provisions
The tax credit is an interest-free loan that must be repaid over 15 years.
To learn how, click here
The minimum repayment amount must be 15 equal annual installments. For example, if the credit amount is $7,500, then the homebuyer must repay a minimum of $500 each year for 15 years.
A homebuyer must begin repaying the credit two tax years after claiming the credit. For example, if the credit is claimed on the 2008 tax return, repayment of $500 (or less, if the credit amount is less than $7,500) per year begins with the 2010 return.
If the home owner sells the home for a profit and there is a remaining credit, then the home owner is required to repay the remaining credit during the tax year of the home sale. The amount of the repayment will depend upon the amount of profit from the home sale:
- If the profit on the sale is more than the remaining credit, then the home owner must repay the entire remaining credit.
- If the profit on the sale is less than the remaining credit, then the home owner must repay an amount equal to the profit on the home sale. The remaining credit payback will be forgiven.
If the home owner sells the home but did not make any profit on the home sale, then the remaining credit payback would be forgiven.
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Find Out More
Further information regarding the tax credit may be found at www.Federalhousingtaxcredit.com or www.irs.gov. This information is provided for general awareness only, is not intended for the purpose of providing legal, account, tax advice or consulting of any kind. Please consult with your tax professional for complete details.
With these new changes in effect, the sooner you purchase your new home, the better. We will continue to keep you posted on any new developments. In the meantime, please don't hesitate to contact one of our Sales Consultants for more information. It's time to stop waiting and time to start living in your new K. Hovnanian Home. Click here to begin your new home search!
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