On July 30, 2008, President Bush signed a major housing bill into law. As part of the housing bill, Congress has created a new, temporary tax credit to provide an incentive for first-time homebuyers. The $7500 credit is available for the purchase of a principal residence on or after April 9, 2008 and before July 1, 2009. Please encourage any first-time buyers that they should check with their tax advisor as to any specifics, but familiarize yourself with some of the fundamentals.

Basically, Congress has created a tax credit for first-time homebuyers up to $7500. The effect of this is a direct reduction of their tax liability, or even a tax refund if less than the total credit was due. There are some income restrictions, so all buyers should check with their advisors before making assumptions. The credit does include a repayment feature over a 15 year life span, or approximately 6.67% if the full $7500 is received.

Although the money is not available to be used as a down payment, first-time buyers will enjoy a greatly reduced obligation on that year¹s tax. Along with the additional deductions for real estate taxes and interest, the incentive can be the additional tool to get buyers to go under contract.

For more information, please visit the Association website at: www.rascw.org and click on "First-Time Homebuyer Tax Credit".