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Saturday, November 07, 2009

Expanded First-Time Home Buyer Tax Credit Becomes Law

1. For first-time home buyers:..... as high as $8,000. The legislation defines "first-time home buyers" as anyone who has not owned a principal residence in the three years prior to making the purchase.
Old law:  buyers needed to close by Nov. 30.
New law:  contract before May 1, 2010... the new law raises the annual incomelimits from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples.
2. For current home owners: In addition, the new law makes most current homeowners eligible for a tax credit of up to $6,500 when they purchase their next primary residence. Under the terms of the legislation, current homeowners must have lived in their home for five consecutive years over the previous eight to be eligible. Qualified home buyers can obtain the credit on homes purchased between Nov. 7 and the end of April 2010. That means they need a signed sales contract on a home before May 1, 2010, but they have until the end of June to close the sale.
3. Additional specs: And as long as they use the property as their primary residence for three or more years after the purchase, buyers don't have to pay it back. Furthermore, buyers can claim the credit on their 2009 taxes, even if the purchase was made in 2010 by filing an amended return...we can help with brokerage and amending

4. Fighting fraud: he new law includes measures designed to limit its abuse. Anyone claiming the credit must now provide documentation to prove that the sale has closed.
5. Price tag: First-time home buyer tax credits have cost the government around $10 billion in lost revenue through Aug. 22. The expanded credit program is projected to cost an additional $10.8 billion or so.

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