The Real Estate Deal
Editor Cindy Zetts dishes on real-estate and development around Puget Sound: She lived in apartments, townhomes and houses -- a dozen of them in four states -- before settling in the Seattle area in 1997. After taking a bath on the sale of her first home, in South Florida, she vowed to wise up about real estate. She bought a house in Covington 10 years ago because, well, she could afford one there.
SubscribeAugust 28, 2008 4:43 PM
Housing-relief: That $7,500 is a loan
Posted by Cindy Zetts
The housing-relief law passed at the end of last month included a tax credit of up to $7,500 for first-time homebuyers. But -- this has confused people -- it isn't a gift.
It's basically an interest-free government loan that has to be paid back over 15 years (that's $500 a year).
It's not a tax deduction, where your income is reduced by $7,500. It's a tax credit, which means the money is added to the amount you paid in taxes and you get it back dollar for dollar as a tax refund.
And yes, it does have to be paid back -- which is sort of a bummer. But an interest-free loan is nothing to sneeze at, so if you qualify, take the credit. Don't scoff because the money has to be paid back. It's still a freebie.
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