Because of the recent recession that has hit the economy of the country; the housing industry experienced a dip in sales, causing prices of properties to go down as well. The government, realizing the importance of the housing industry in the country's economy, implemented several laws that aim to boost property sales.
In 2008, the law on Tax Credit for Home Buyers was initiated and by 2009, was revised further. The revision in 2010 saw new legislation being created for tax credits, based on newer developments in the economy.
The new tax credit facilities approved in 2010 were targeted at new home buyers and made it easier to qualify for the credit. Provided below is a detailed summary of the legislation to make it easy to understand.
The law applies to first-time buyers who have not owned any principal residence in the last three years and is subject to income limitations, depending on the status of the individual. A single buyer should have an adjusted gross income between the range of $125,000 and $145,000 to be eligible for the full credit. Married couples, however, need to earn between $225,000 and $245,000 as they are expected to earn more than that of a single individual.
For homes worth more than $800,000, no tax credit will be given as stated by the newly revised law for 2010. An age limit of 18 years old upon closing date is also established in the revised law.
The revisions in the law are targeted for home purchases made on or after November 6, 2009. Thus, the tax credit introduced in 2010 can only be claimed by buyers able to provide proof of purchase and a validly executed settlement statement, attached to their tax return.
The revisions to the Tax Credit for Home Buyers law can be confusing. However, there is a more detailed explanation of the law and its guidelines and revisions is available on the IRS website.
The government website also has FAQs and instructions on the on how to apply for the home purchase tax credits from the same website. The site has the rundown on all requirements needed when applying for the credit.
In 2008, the law on Tax Credit for Home Buyers was initiated and by 2009, was revised further. The revision in 2010 saw new legislation being created for tax credits, based on newer developments in the economy.
The new tax credit facilities approved in 2010 were targeted at new home buyers and made it easier to qualify for the credit. Provided below is a detailed summary of the legislation to make it easy to understand.
The law applies to first-time buyers who have not owned any principal residence in the last three years and is subject to income limitations, depending on the status of the individual. A single buyer should have an adjusted gross income between the range of $125,000 and $145,000 to be eligible for the full credit. Married couples, however, need to earn between $225,000 and $245,000 as they are expected to earn more than that of a single individual.
For homes worth more than $800,000, no tax credit will be given as stated by the newly revised law for 2010. An age limit of 18 years old upon closing date is also established in the revised law.
The revisions in the law are targeted for home purchases made on or after November 6, 2009. Thus, the tax credit introduced in 2010 can only be claimed by buyers able to provide proof of purchase and a validly executed settlement statement, attached to their tax return.
The revisions to the Tax Credit for Home Buyers law can be confusing. However, there is a more detailed explanation of the law and its guidelines and revisions is available on the IRS website.
The government website also has FAQs and instructions on the on how to apply for the home purchase tax credits from the same website. The site has the rundown on all requirements needed when applying for the credit.
About the Author:
The individual has been providing advice pertaining to tax-related issues for the past three years. Moreover, the author enjoys writing about New York neighborhood topics, such as Hudson Heights apartments for rent along with apartments for rent in Alphabet City.