Monday, February 09, 2009

Homebuyer Tax Credit Pending Congress Approval

Last summer a new homebuyer tax credit of $7500 is offered to first time homebuyers who make a purchase to July. This tax credit, along with low interest rates, has helped to generate 10-15% more in home sales.

Now Senate has passed a new homebuyer tax credit to all buyers who claim a property as their primary residence will get a tax credit of 10% of the purchase price up to $15,000 tax credit.
  • The current version of the tax credit still must be approved by the House and signed by the president
  • If passed, the homebuyer would be eligible for a tax credit up to $15,000 for federal income tax for any principal residence by any homebuyer
  • Actual amount of credit would be based on 10% of the purchase price of the home or $15,000 which ever is less.
  • The tax credit does not have to be paid back, unless the buyer sells the home within 2 years or less.
  • Purchases must take place within one year of the legislation enactment.
  • The credit maybe claimed on 2008 income tax form.
  • If enacted, the new tax credit would immediately negate the $7500 first time homebuyer tax credit currently available.