The present sub prime crisis has thrown open a new challenge to the government. This is to push the infrastructure business to levels of past periods so that the overall system benefits from it and gives a respite to tide over the economic crisis that we are facing now. As a part of such initiatives to boost the real estate markets, the federal government has come up with incentives that encourage you to buy homes. Home buying tax credit is one such initiative. The scheme works in a way by which any first time home buyer, who purchases a home, is eligible to get a tax credit amounting to ten percent of the value of the home purchase or eight thousand dollars, which ever is less. This certainly helps you make up your mind to buy a home. There are few factors which make you eligible to avail of this tax credit.
The purchase has to be done in the time period from 1st January 2009 to 31st December 2009. Also, the term first time home buyer is a strict compliance factor. To be labeled as a first time home buyer, you should not have bought any principal residence in the last three years. In case you are married, even the purchase of your spouse is scanned and has to be more than three years old. Of course, any vacation home or homes that are not used as residences can be bought as these do not qualify as principal residences and hence shall not disqualify you. These credits can be applied for on special forms created for this purpose, submitted along with documented proof of purchase. These are applied for while filing your federal tax returns. The credit is refundable and to capitalize on the credit, the owners have to hold the house for at least three years.
This economic stimulus package is a wonderful measure that encourages buyers to go in for home purchases. Many home buyers are waiting for a better correction to home rates after the crisis had exploded and such packages can make them hasten their decision and buy the home that they have been yearning for long. Such a tax credit programme can boost sales, which in turn will allow builders to go in for construction of new projects, thereby boosting the economy as well in the long run.
Those home buyers who have qualified for FHA loans or even bridge loans as offered by certain non-profit organizations can also apply for tax credit under this programme. One big pre-condition for this credit to be effective is the fact that your income has to below $75000 for individual filers and $150000 for joint filers.
The purchase has to be done in the time period from 1st January 2009 to 31st December 2009. Also, the term first time home buyer is a strict compliance factor. To be labeled as a first time home buyer, you should not have bought any principal residence in the last three years. In case you are married, even the purchase of your spouse is scanned and has to be more than three years old. Of course, any vacation home or homes that are not used as residences can be bought as these do not qualify as principal residences and hence shall not disqualify you. These credits can be applied for on special forms created for this purpose, submitted along with documented proof of purchase. These are applied for while filing your federal tax returns. The credit is refundable and to capitalize on the credit, the owners have to hold the house for at least three years.
This economic stimulus package is a wonderful measure that encourages buyers to go in for home purchases. Many home buyers are waiting for a better correction to home rates after the crisis had exploded and such packages can make them hasten their decision and buy the home that they have been yearning for long. Such a tax credit programme can boost sales, which in turn will allow builders to go in for construction of new projects, thereby boosting the economy as well in the long run.
Those home buyers who have qualified for FHA loans or even bridge loans as offered by certain non-profit organizations can also apply for tax credit under this programme. One big pre-condition for this credit to be effective is the fact that your income has to below $75000 for individual filers and $150000 for joint filers.
