Tax credit up to $15,000 for first-time homebuyers.
This Act introduces a refundable tax credit for individuals purchasing their first principal residence, aiming to make homeownership more accessible. Citizens can receive up to $15,000, significantly reducing initial costs. The credit is subject to limitations based on the buyer's income and the home's purchase price relative to local median values, and early sale within 4 years may require repayment of a portion of the credit.
Key points
Maximum Tax Credit: You can receive up to 10% of the purchase price, capped at $15,000, as a refundable tax credit when buying your first principal residence.
Income and Price Limits: The credit is phased out if your modified adjusted gross income exceeds 150% of the Area Median Income or if the purchase price exceeds 110% of the area median purchase price.
First-Time Buyer Requirement: You must be 18 or older and must not have owned any residential property during the 3-year period ending on the purchase date, nor have claimed this credit before.
Recapture Rule: If you sell the home or it ceases to be your principal residence within 4 years of purchase, you must repay a portion of the credit (25% of the credit amount for each remaining year in the recapture period).
Credit Transfer Option: You may elect to transfer the credit to your mortgage lender, who must then provide you with the equivalent amount (e.g., as a cash payment or down payment assistance) at the time of purchase.
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