Rochester MN Real Estate Market Blog

The federal government recently passed a provision for first time home buyers who qualify, obtain an up to $7,500 tax credit against their federal income taxes.  Eligible buyers must be first time home buyers and the credit qualifies for both preowned and new construction homes. This is a tax credit which directly reduces the home buyers federal tax bill dollar-for-dollar however any savings incurred must be repaid at a rate of $500 per year starting two years after closing at zero interest.  The tax credit provision is designed as a stimulus measure to incentivize first time buyers giving them a substantial tax savings their first year of ownership. There is an income cap of $95,000 for individual tax payers and $170,000 for married tax payers and the tax credit goes down as income goes up. To review the all the terms of the provision see: http://www.federalhousingtaxcredit.com/index.html

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