RICHMOND, VA (WWBT) - There are two sets of rules when it comes to the home buyers tax credit and depending on when you purchased your home, the difference could be thousands of dollars.
The difference? One is a gift, the other a loan. If you bought in 2009, you received a gift from the government to help buy your home. If you bought in 2008, it was a loan. That means you have to pay it back, and you will do so over the next 15 years.
Sean Toler bought his condo back in June of 2008 he had no idea he had money coming from the government.
"Only when I did the tax return and the tax return software told me," said Toler. That was six months after he bought his new home. It was a welcome surprise.
"It was the difference between paying $1,500 and getting a $6,000 tax return," he said.
Sean knew all along that he would have to pay that money back. But an interest free $7,500 dollar loan was still a nice benefit. Until a few months later when congress passed a new law, with a new tax credit, that was more money and came with another fringe benefit.
"When there wasn't a repayment, the deal got sweeter," said real estate agent Gary Duda.
The 2009 version did not require the home buyer to pay back the credit. Duda had clients who purchased home under both versions of the law. He thinks the process is confusing.
"People who bought at the time didn't quite understand what they were getting into," he said.
And many are still wondering now. In part because those who received $75 hundred loans, have to begin paying them back in the spring 2011. Sean Toler is prepared to start that process, but think's the government's sales pitch was a little misleading.
"Yeah, I mean they call it a tax credit, not a tax loan," he recalled.
An important distinction for those who have to start paying the government back in a few short months.
If you aren't sure which category you fall under, Check out this link from the U.S. Treasury Department that outlines the two different benefits.