Quick Facts about the $7500 Tax Credit

The tax credit is for 10% of the purchase price, but not to exceed $7500. So if you purchased a $200,000 house x 10% = a tax credit of $7500.

Single family homes including condos are eligible.

You receive the tax credit on your tax return in the form of a refund, not when you purchase the home. Therefore, if you purchased a home and received the full $7500 tax credit and your tax bill for the year was $2000--you would receive a refund of $5500.

The income limit is $75000 for individuals and $150000 for a joint return. Earning more than this and the credit begins to phase out in proportion to one's income.

Only people who have not owned a home as a primary residence in the past 3 years previous to the purchase qualify.

The tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.