This is a story that I havent seen much in the news, so I thought I would post it here for the benefit of others.
The federal government is offering a $7,500 tax credit towards a first home (its actually 10% of the purchase price or $7,500,whichever is lower – so a house above $75,000 will qualify you for the full tax credit). The house should have been bought between July 2008 and July 2009.
So, why is this a loan? Basically, the credit provided to you by the government needs to be recaptured over a 15 year period. You will end up paying the amount as an additional amount on each tax year, starting in 2010 for 15 years. (If you sell the house then you might have to close this loan from the government right away – special rules apply, so read up).
This tax-credit is available for tax filed for the year 2008. But, you can claim the credit even on houses that you bought in 2009 (up to July).
If you bought a home in the last 6 months, or plan on buying one in the next 6 months, this could be a great source of money for you.
Remember – to look at it as an interest free loan and not as an tax-credit.
More information is available at: http://www.federalhousingtaxcredit.com/
Google Search for more articles on the $7,500 tax-credit for 2008.http://www.google.com/search?hl=en&rlz=1T4GGLL_en&q=7500+tax+credit+first+time+home+buyer+2008