There is a Housing Assistance Tax Act of 2008 that proposes a refundable credit available to first time buyers of homes, up to $7500. This tax credit is actually lesser than this amount, or 10% of the price of the house, of course given that the house must be the principal residence of the owner and purchased after April 8, 2008, and before 1 July, 2009. The tax credit of this income tax loan also runs out when your gross income is between $75000 and $95000 for singles and $150,000 to $170,000 for married, filing for a joint ownership. This tax credit is refundable, which indicates that even if you have zero taxable income and pay no tax, you are eligible for this entire credit as a tax loan or refund.

You should be aware of certain things before you actually jump to purchase a home using this income tax loan, so as to speak. The first time home buyer credit should be titled as the ?The advance loan at 0% by the US Government?. The tax credit has to be completely paid within a period of 15 years. In the first year, the tax payer gets the benefit of $7500, and then repays the credit in the unit of $500 a year for the rest of the duration of the 15 year term. This benefit can be seen as borrowing $7500 over 15 years with 0 % interest. If calculated with an annual compounding rate of 6%, the savings in interest is $4083.

Of course, the taxpayer should consider whether at all to purchase a house, in these times of economic recession. Owning a personal asset that is more likely to depreciate in value over the years may incur huge losses if you do wish to sell it in the future, and added costs of repairs, maintenance, utilities, throughout the period of ownership. Such an income tax loan may come handy when making the purchase, but clearing the debts, and paying the bills that come with the ownership of such a property in times like these is something you cannot afford to forget.