Isn't there a tax credit for new homeowners?

Question

My husband and I purchased our first home in September of 2006. Shouldn't we be getting some sort of credit for that? What is it called?

Answer 1

There isn't a tax credit for purchasing a new home, but there are some deductions you will be allowed to take if you can itemize your deductions.

The way it works is this. By filing a joint return with your husband, you get a standard deduction in income (I think of it as a deduction for living expenses) of $10,300 for 2006. If your itemized deductions are over this amount, you can use the amount of itemized deductions instead--which will lower your taxable income and therefore lower your tax liability.

Now, in your case, you will have mortgage interest that you can deduct, and real estate and school taxes you will be able to deduct if you paid any in 2006, and points if you paid them.

Also, you'll want to apply for a homestead exemption through your county tax office, if you haven't already. That will lower your real estate taxes a bit for 2007.

I hope this information helps you, and congratulations on the purchase of your new home. There's just something special about being able to say... "It's MINE." :)

Answer 2

Not unless it was in Washington DC and you purchased the home on 1/1/06 which was when that special credit expired - a September purchase there wouldn't qualify. Anywhere else, no.

If you pay enough mortgage interest and property taxes, you might save some on taxes by itemizing.

Answer 3

There is no credit for buying a new home. The only thing that you can deduct is the interest you paid during the year and your property taxes that you have paid, But the only way to take advantage of that is that you have to fill out a Schedule A and itemize.

Answer 4

No.

As you closed late in the year and you are married, you will probably not see any tax benefit to owning the house for 2006.

That could change in 2007 depending on how much you pay in interest.