Wednesday, July 30, 2008

Housing Assistance Tax Act of 2008

I want to go over one of the provisions of this new bill, but I’m going to skip over most of the bill, because it doesn’t really affect me.  Be sure to give it a good read to catch those parts…

I.  Assistance for Home Buyers and Home Owners

Refundable first-time home buyer credit

If you are a first-time home buyer (which I would be), and you make your purchase between April 9, 2008 and July 1, 2009, you get up to a $7,500 tax credit (not deduction, credit – very important difference here), to be repaid at the rate of up to $500 over the next 15 years.  This assumes that your AGI is under $75,000 or $150,000 filing jointly.

Basically, you get up to $7,500 in interest-free loans.  So, for instance, I could take advantage of this deal and completely be out of credit card debt by the time I get my refund.  That frees up over $200/month in minimum payments, and about $400/month in debt reduction (if I were to quit the snowball).  That creates a lot of space.  A LOT.  This is something that I’m thinking about very seriously…

No comments:

Post a Comment