First Time Buyer Tax Break

A tax rebate is good for a first time homebuyer to take advantage of ... right?

QUESTION: Travis heard about a tax rebate for a first-time homebuyer. Has Dave heard of that, and is it worth it to take advantage of that? Yes and no, says Dave.

ANSWER: It’s called a tax credit, but it’s more like a tax credit/loan. They give you $7,500 off your tax bill this year, and you repay it over the coming years, about 15 years. Every year you owe that money back without interest. So your tax bill is decreased by $7,500 this year and increased by $7,500 over time for the next several years. I wouldn’t do it, because you are taking that money and have to give it back. If they gave you a straight federal tax credit where you got $7,000 and didn’t have to give it back, I’d take that in a second.