There are several provisions in the stimulus package that will be beneficial for home buyers and will help stimulate demand for housing. Chief among these is an $8,000 home buyer tax credit for new home buyers. For qualified home purchases in 2009, the legislation:
- Stipulates that the $8,000 tax credit does not have to be repaid, unlike the tax credit passed last summer;
- Keeps the tax credit refundable, or claimable regardless of tax liability;
- Extends the sunset date from July 1, 2009 until Dec. 1, 2009 so that consumers can utilize it during the critical summer and fall buying months;
- Allows tax credit home buyers to participate in the mortgage revenue bond program; and
- Permits state housing finance agencies to help buyers at closing by advancing the credit amount as a loan using tax-exempt bond proceeds.
There are several other important components in the legislation that will help small businesses and bolster the housing market. H.R. 1, the American Recovery and Reinvestment Act of 2009, will:
- Help home borrowers in high-cost markets by extending the 2008 FHA, Fannie Mae and Freddie Mac loan limits of $729,750 through the end of this year;
- Temporarily allow exchange of Low-Income Housing Tax Credit allocating authority for tax-exempt grants and appropriates $2 billion in HOME funding for affordable housing projects;
- Provide up to a 10-year deferral of tax due to business debt restructuring;
- Expand the net operating loss carry back period from two years to five years for small businesses (businesses with average gross receipts of no more than $15 million over the prior 3 years) for losses arising in tax year 2008;
- Extend the 25C existing home remodeler credit through the end of 2010, increase the credit rate from 10 percent to 30 percent, raise the lifetime cap from $500 to $1,500, and expand the set of qualifying property;
- Provide an Alternative Minimum Tax patch for tax year 2009;
- Increase bonus depreciation and Section 179 small business expensing for business investment in 2009;
- Increase New Markets Tax Credit allocating authority for 2008 and 2009; and
- Delay for one year the start of the 3 percent government contractor withholding requirement (from 2011 to 2012).
(Information from National Association of Home Builders)
Tags: first time buyer, home, stimulus, tax credit
There was talk of the credit being 15K. It sounds like they decided on eight. Either way, good time to buy! I am in town looking at homes that, even if I worked for the next 50 years, I will never be able to afford.
What constitutes a “new home buyer”? I bought the house that my wife and I are living now before we were married, so technically, she has never bought a house. If we put the new house in her name, would we quality for the $8000 tax credit?
Matt, Ivory Homes has information on its website at http://www.ivoryhomes.com/?mID…..redit+utah that answers your question:
“The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.”
What if neither the husband or wife has bought or owned a home and are currently divorcing? Can both the husband and wife buy a home separately?
Voters wanted change, but not inflation and freebees we can’t afford.