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Showing posts from February 6, 2009

Reflections on the Proposed Homebuyers Tax Credit

Earlier this week, the U.S. Senate approved an amendment to the proposed economic stimulus plan that is of particular interest in the real estate community. The Liberman-Isakson Amendment, as proposed, would extend and broaden last years first time home buyers tax credit. (Keep in mind that the Senate has not yet voted on the bill; the House still has to agree, and the President must sign the law before it might take effect.)

Here are the essential points as proposed:

Home Buyers will receive a pure tax credit (a reduction of the taxes otherwise owed)The credit would be 10% of the purchase price, up to $15,000.00. Provided that the home purchased becomes the buyers primary residence, for at least two years
You can only use the tax credit one time.If the home is purchased in the first year this law exists, you can elect to take the credit as if the house was purchased on December 31, 2008 (that is, the credit can be applied on 2008 returns.Or, if a home buyer prefers, the credit can be s…