The Extention AND Expansion of the First-time Home Buyers Tax Credit
The Senate passed the extention/expansion of the First-time Home buyers $8000 tax credit earlier this week, and the House passed it yesterday. Many expect the president to sign it into law today because it also includes an extention of unemployment benifits. (Signed on Friday:)
1. The extention includes purchase contracts made before May 1, 2010, (which must be settled before July 1, 2010).
2. The income limits have been increased, $125,000 for a single purchaser, $225 for married.
3. The tax credit has been expanded to include current homeowners who are selling their current home (if they've lived there 5 of the previous 8 years), and are buying a home by the previous date. The tax credit in this case is $6500.
4. They've also added a limit to the cost of the home purchased: $800,000.
NAR (National Association of Realtors) has published a chart detailing the changes to the first-time home buyer tax credit.
National Association of Home Builders, NAHB estimates that the extended and expanded home buyer tax credit will create 211,000 jobs and generate 180,000 additional home sales in the coming year. It is also expected to generate $9.6 billion in wage income and $6.9 billion in federal, state and local taxes.
The legislation also extends unemployment insurance benefits and offers relief to cash-strapped firms by providing broader tax benefits for businesses with net operating losses (NOLs). "The new NOL rules will throw a lifeline to struggling businesses, allowing them to continue making payrolls, paying business loans and otherwise keep their doors open until the economic recovery takes hold," said NAHB president Joe Robson.
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