Real Estate And Tax Credit
If you interested in buying a home, then you should have some knowledge about the tax credit that is being offered by the government. In fact, recently the US Senate approved the extension of tax credit to first time home buyers and a reduced tax credit to repeat home buyers. First time home buyers can get a tax credit of up to $8,000, while repeat home buyers who have lived for at least 5 years in their present homes can get a credit of up to $,6,500. |
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When it comes to first time home buyers, the tax credit is usually 10 percent of the price that the house was bought for. In addition, the house should be the main residence of the buyer. However, there is a maximum limit on the tax credit, which is $8,000. There is also an income limit on getting the tax credit. An individual buyer should have an adjusted gross income of $75,000 or less in order to get the entire amount of the tax credit. For married couples, the adjusted gross income has to $150,000. In case the buyer is above this income limit, he will be eligible for partial tax credit.
In addition, the tax credit is only applicable to first time home buyers who have bought their homes on or after January 1, 2009. The fact that the Senate has approved the extension of the tax credit for first time home buyers, even people buying in 2010 can avail the credit. However, these people would have to sign the agreement by April 2010, but will have until the end of June 2010 to close the deal.
This tax credit that home buyers avail of does not have to be paid back to the government. It is suppose to be like an incentive to spur the growth of the real estate market that has taken a beating because of the recession and bursting of the housing bubble.
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