First Time Home Buyer Tax Credit Question

Q: “My name is Ken. I was interested in your listing. However, I had a question on the tax credit. Does this home qualify for the entire tax credit and do I need to take out a mortgage in order to apply tax credit towards purchase? I currently own a business property which I would like to sell. I then wanted to apply the tax credit and pay cash on the balance. Can it be done this way? Your feedback would be appreciated.”
Sincerely
Kenneth

A: Hi Ken, Thanks for your question. The first time home buyer tax credit is based on your income not on the price of the home that your purchase. There is no stipulation on receiving the tax credit whether you have a mortgage or you pay cash for your property.

Below is a chart and some related posts that will help you learn more about the first time home buyer tax credit. I would discuss loan options with your mortgage officer or accountant to see if a cash purchase or loan would be more financially beneficial. You may also want to ask your loan officer if your business property would disqualify you for this program. According to the consumer guide, you cannot have owned a principal residence in three years.


A CONSUMER GUIDE TO THE FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT

First-Time Homebuyer Federal Tax Credit Info

First-Time Homebuyer Tax Credit Details

Great News! Tax Credit Can Be Used for Down Payment

Frequently Asked Questions for First-Time Homebuyer Tax Credit from the National Association of Realtors website, Realtor.org

First Time Home Buyer Tax Credit Loans


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