In order to help return stability and growth to the U.S. housing market the Housing Working Group of Business Roundtable has made bipartisan recommendations to raise the tax credit, keep mortgage rates low and modify eligibility requirements for the tax credit among other items.
The recommendations of Business Roundtable, an organization of leading U.S Corporation CEO’s, include:
1. Keep mortgage rates at historically low levels for at least one year,
2. Expand the current first time home buyer tax credit from 10% up to $8,000 to 10% up to $15,000,
3. Remove income restrictions on the first time home buyer tax credit and
4. Include all primary residence purchases for one year.
Other recommendations deal with conforming loan limits, mortgage lending practices and a review of foreclosure mitigation and loan modification programs.
In its current form the Federal First Time Home Buyers Tax Credit is limited to 10% of the cost of the home up to a maximum of $8,000. First time home buyers and those who have not owned a home during the last 3 years are eligible. All types of homes are eligible; single family homes, condos, townhouses etc. as long as they will be used as principal residences. The tax credit is “refundable” which means it is a credit toward your federal income taxes. It will either reduce the taxes you owe or any excess above the taxes you owe will be refunded to you. If you don’t want to wait until next year when you file your taxes you may file for your refund after closing on your new residence and receive your entire refund.
The tax refund is available for individuals who have an adjusted gross income of no more than $75,000 ($150,000 if filing jointly and phases out at $95,000 and $170,000. No repayment is necessary unless you sell the residence within 3 years in which case the entire amount of credit is recaptured upon sale. Currently, you must close on your home before December 1st 2009.
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