The economic stimulus package that was passed by Congress is slightly different from the one initially proposed by President Obama, but will still have a strong impact on home sales and the economy.
The updated package changes removed the credit from being offered to all buyers and keeping it a first time home buyer’s credit only. (A first time home buyer is anyone who has not owned a home in the past 3 years.)
The change also removed the requirement for the credit to be repaid. This in itself makes the tax credit a true tax credit. The only stipulation added to that change is that the credit will be required to be repaid if the home is sold within 3 years after purchase. It has also increased the current tax credit from $7,500 to $8,000.
Here are the key points to the legislation that Congress has enacted.
- The income limits to qualify for the full tax credit are, single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000.
- The tax credit is for first-time home buyers, or anyone that has not owned a home in the past 3 years.
- The tax credit does not have to be repaid unless the buyer sells the home within 3 years after purchase.
- The amount of the tax credit a home buyer is eligible for is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
- For this revised tax credit, the purchase dates have been changed and the updated tax credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
This is great news for first time home buyers. With home prices down and interest rates lower than ever, home buyers can now purchase more home with a lower monthly payment than buyers that purchased in 2002 and later. And they get an $8,000 boost to kick things off!
For more information and frequently asked questions, visit the National Association of Home Builders site at www.federalhousingtaxcredit.com or,if you are thinking about buying a home and would like to know more about other programs available to first time home buyers, feel free to contact me or visit my site at http://www.MLSHomeScout.com
