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NEW TAX CREDIT PLAN MOVING FORWARD...
Posted by V.K. [Mel] Melhado P.A. on Saturday, February 7th, 2009 at 12:07am.The other night, the US Senate added a significant homebuyer tax credit to the housing stimulus plan. Here are the key elements of the credit:
1. The tax credit is in the amount of $15,000 or 10% of the purchase price (whichever is less), with the option to utilize all in one year or spread it out over two years. The credit does not have to be paid back!
2. The tax credit is available to all purchases of any home from the date of enactment for one full year - no longer just a first time home buyer.
3. You will be able to claim the credit against your 2008 tax return.
4. Buyers must occupy the home for two years as their principle residence.
5. The credit includes a two year recapture provision (if you leave the home within two years, you lose the credit).
6. Purchases of homes by investors are inelidgible.
7. This sunsets the previous $7,500 Housing Tax Credit on the date of enactment.
8. The credit is NOT refundable. (The $7,500 credit WAS refundable, but had to be paid back).
The bill is currently working its way through Congress. The House of Representatives must still negotiate with the Senate, and the House bill does not contain the credit. There could be additional changes, but given everything, it is an important step in the right direction!
V.K. [Mel] Melhado PA
Downing-Frye Realty, Inc.
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