Remember when the homebuyer credit first came out? We thought it was a pretty cool offer. First time homebuyers were offered a credit of $7,500 on their 2008 tax return if they purchased their home after April 8th 2008 and before July 1st 2009. An offer the IRS had never previously made. There was quite a bit of buzz about it. There was one catch the $7,500 had to pay it back over 15 years starting 2 years from the year of the tax return they took the credit on. So it was really more like an interest free loan. The tax return for 2010 will be the first year those unlucky tax payers will have to begin paying their “loan” back. A $500 repayment will need to be made starting in 2010 and continuing through 2024.
The next wave of homebuyer credit was a better deal. A credit of $8,000 was offered and there is no need to repay it. The third wave of homebuyer credit was even better offering a credit of $6,500 to homeowner who had previously owned a home in addition to the $8,000 for first time home buyers and neither had to repay it.
The credit may have gotten better as time went by but it isn’t much consolation to those who took advantage of the homebuyer credit in 2008.