It’s Time to Repay First-Time Homebuyer’s Tax Credit
For many first-time homebuyers the allure of an interest free loan from the government was enticing enough to draw them off the fence and purchase their first home. It seemed like a great deal at the time, any home purchased between April – December 31st of 2008 by a first-time homebuyer received $7,500 in “free” money. However, the money wasn’t exactly free. It was a loan that was to be paid back in increments of $500 per year over 15 years. Not a bad deal, right?
It wasn’t a bad deal… until less than 6 months later they learned that a better program was created and it was one that offered more money ($8,000) and it DIDN’T have to be paid back. When the new program was passed I know of many people who were happy because they thought it meant they too were included in not having to pay back the cash. Now, there are several people who are surprised to find out they owe $500 a year for the next 15 years.
There are also first-time homebuyers who bought a home and for whatever reason have sold that home already. Now that tax time has come around, they will not only have to pay capital gains tax on the profit they made, if any, but they will also have to repay a large portion of the $7,500 tax credit they received as well.
Is it fair that a first-time homebuyer who bought a home on December 31st owes $7,500 while another person could have bought a home a few days later and receive more money and owe nothing?
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Comments
I was one of the people who purchased my home at the end of 2008 and received the 7500 “tax credit”. I was fully aware that it was a zero interest loan that would have to be repaid. I was a little bitter when i heard of the 8000 dollar credit that would not have to be repaid for those who purchased homes a couple of months after mine. But the fact remains that i received a loan with zero interest and that was still a very good deal. So yes to answer your question i definitely agree that it is fair that i still must repay this “credit”. What about the people who purchased homes just weeks before the tax credit I received had become available? Is it fair to them since they were offered nothing at all?
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