by Teresa Larson, 20+ years year real estate experience
The home buyer tax credit available now is a dollar for dollar reduction in federal taxes. It is available in all 50 states. The tax credit essentially converts a portion of a home owner’s mortgage interest deduction into a tax credit for federal income taxes. It is an annual IRS tax credit for the life of the original mortgage. The tax credit is only good for the original loan so if you refinance you will not be eligible. You must apply for this as part of your loan application before you purchase your home.
This is only available to first time homeowners who meet certain income, purchase price and owner occupancy qualifications. Unless you purchase in a targeted area. These area’s are open to other buyers. Qualifications are determined by county, family size. Income limits range from $65,300 to $137,200. There is a recapture tax if your income grows substantially and you sell the property within 9 years. Note if you buy in a targeted area the guidelines are more liberal. The income and purchase price guidelines are higher. All of Utah County is targeted and other areas are ………read more