First Time Homebuyer $7500 Tax Credit (Well Kinda)

Bought your first house between April 9th 2008, and July 1st 2009?

The government is going to bail you out for $7500.. Well not really, you have to read between the lines on this one, and understand what you are getting into before you take the money.

I was excited to see this program, because it applies to me, I meet all the qualifications. Then I learned the real deal, and became slightly less satisfied, but heck I'll still take their money.

So, you can claim up to $7500 as a tax credit on your taxes this year. Since it is a dollar for dollar credit, Uncle Sam will increase your tax refund by $7500, or reduce what you owe to zero, and send you a check for the rest. The keyword here is up to $7500. They only pay 10% of the amount that you paid for your home. In my case, I'll get 10% of my meager 43,000 house, or $4300.

This may upset you a bit, but keep reading, you will be just fine with it. So, this is not a traditional tax credit, like when the government gave us stimulus checks that we were free to do what we chose with them (booze, cigarettes, electronics, hookers, and the like)..

This tax credit must be repaid within 15 years, over that period of time.. You start the repayment 2 years after you take the money, and they recapture the entire amount 17 years after you take the money.

I'm still taking their money, and you should too (if you qualify)... Toss the money in a CD or other safe investment tool, or even a high interest savings account. Right now the best ones pay about 4 percent.

Not calculating the yearly payback (you would pay that yourself), at 4% APY that $4300 would turn into $7744.06 after 15 years.

Plus you would have access to the cash in case of emergency.

Sounds like a decent deal for me, I'll take the money and run.

Here is a link to the dirty details.. Click my adsense links to buy me a beer..

Federal Housing Tax Credit

APY Interest Calculator (figure your earnings)

Bankrate Savings Account APY rates