Sunday, December 27, 2009

$8,000 Tax Credit for Buying $10,000 Home?


Question: Could a qualified person get a $8,000 tax credit to buy a $10,000 house?



Answer: In short, no. You can’t get $8,000 for buying a $10,000 house. Why?


There’s no minimum purchase, but the tax credit is written as “10% of the purchase price, up to $8,000″. Thus, if you spent $10,000 on a home, you’d get 10% of that price - or $1,000 - as a tax credit.


One other important point: there’s no such thing as a $10,000 home in metro Phoenix that one would actually want to live in. If it’s priced at $10,000 it’s either uninhabitable or located in an area where even the criminals are afraid to walk the streets at night. Phoenix is no different from any other big city in the US: the really cheap real estate is really cheap for a reason.


See this post for an example of a Phoenix-area house listed for sale at $12,500 — http://thephoenixagents.com/the-highs-and-the-lows-3/


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This was originally a comment I wrote in reply to a reader who emailed me about our post explaining one aspect of the $8,000 federal tax credit for new home buyers.



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