After much discussion and negotiation, the revisions to the New Home Buyer Tax Credit have been posted. According to the National Association of Realtors Issue Brief, President Obama will be signing off the additions and the following list the highlights to the plan that has been extended to April 30, 2010.
- The income levels will be increased to $125,000 from $75,000 for single home buyers and to $225,000 from $150,000 including the additional $20,000 phase out.
- The $8,000 First-Time Homebuyer Tax Credit has been extended to April 2010.
Additional criteria that will be added to the Tax Credit options once President Obama signs the bill, effective December 1, 2009 are:
- The addition of a Current Homeowner Tax Credit will now allot a $6,500 credit for existing homeowners if they “have used the home sold or being sold as a principal residence for 5 of the previous 8 years.
- Extensions to the Binding Contract rule now includes language that as long as the contract to buy is effective as of April 30,2010, then the buyer will have until July 1, 2010 to close.
- A cap has been set for the purchase prices of the homes applicable to the Tax Credit to $800,000, and dependents are not eligible for the Tax Credit.
- An Anti-Fraud rule has been attached to the language requiring the buyer to attach purchase documents to their tax return for the year the purchase took place.
These new criteria are the first-step of making the Tax Credit a real answer to the national real estate market problems. By opening the credit to existing homeowners and extending the timeline to 2010, it should give a strong boost to the 2010 housing market numbers.
Applying the very-much needed Anti-Fraud rules will help eradicate the fallout from any potentially unethical credit applications and maintain the real sales numbers for the next year.
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