What does the new law mean to the first- time home buyer?
The new law raises the current maximum amount from $7,500 first-time homebuyer tax credit to $8,000, and extends it through November 30, 2009. The great part is that it also eliminates any required repayment if the home owner lives in this home for 36months or 3 years.
These rules apply to purchases of a principal residence by a first-time home buyer after December 31, 2008. For those who purchased on or after April 9, 2008, and before January 1, 2009, the original first-time homebuyer credit enacted last year rules will be applied.
The credit is subject to phase-outs that start for taxpayers with AGI (adjusted gross income) in excess of $75,000 ($150,000 for joint filers) continue to apply to both years.
The effective date for the new law’s no pay-back provision is keyed to “residences purchased after December 31, 2008.” Please note that under these rules a purchase takes place when title passes and not when a contract of sale is executed.
The Senate’s proposal for raising the credit to $15,000 and making it applicable to all home purchasers regardless of income level was rejected during conference negotiations.
Sunday, February 15, 2009
Thursday, February 5, 2009
Home Buyer's Tax Credit
Finally there seems to be good news for home buyers and the housing market...
The Senate last night passed an expansion of the tax credit proposal. The proposal would be available to all purchasers (not just first-time home buyers). NAR (National Association of Realtors) was instrumental in getting this provision passed by the Senate. The key elements are:
· A tax credit in the amount of $15,000 or 10 percent of the purchase price (whichever is less), with the option to utilize all in one year or spread out over two years
· The tax credit is available to all purchases of any home from date of enactment for one full year.
· Able to claim the credit against the 2008 tax return
· Buyers must occupy the homes for two years as their principal residences
· Purchases of homes by investors are ineligible
· Terminates the previous $7,500 Housing Tax credit on the date of enactment
We have been told the Senate is likely to pass its entire Stimulus Bill by this week-end. The House and Senate will then have a conference next week to work out the differences.
The Senate last night passed an expansion of the tax credit proposal. The proposal would be available to all purchasers (not just first-time home buyers). NAR (National Association of Realtors) was instrumental in getting this provision passed by the Senate. The key elements are:
· A tax credit in the amount of $15,000 or 10 percent of the purchase price (whichever is less), with the option to utilize all in one year or spread out over two years
· The tax credit is available to all purchases of any home from date of enactment for one full year.
· Able to claim the credit against the 2008 tax return
· Buyers must occupy the homes for two years as their principal residences
· Purchases of homes by investors are ineligible
· Terminates the previous $7,500 Housing Tax credit on the date of enactment
We have been told the Senate is likely to pass its entire Stimulus Bill by this week-end. The House and Senate will then have a conference next week to work out the differences.
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