First Time Home Buyers – $8,000 first-time home buyers (or if you have not owned a home in 3 years) tax credit for qualified home purchases in 2009. This tax credit is specifically designed to encourage prospective home buyers to get off the fence.
What is the tax credit?
- Does not have to be repaid, it is a true credit
- Is fully refundable
- Will remain in effect until Dec. 1, 2009 so that consumers can utilize it during the critical summer and fall home-buying months
- Allows tax credit home buyers to participate in the mortgage revenue bond program
- Permits state housing finance agencies to help buyers at closing by advancing the credit amount as a loan using tax-exempt bond proceeds
Other Key components that the legislation will create:
- Help home borrowers by restoring the higher 2008 FHA, Fannie Mae and Freddie Mac loan limits through the end of this year (the limit will return to $729,750 from the current $625,500 in the highest cost markets, and will also rise in many other areas because the 2008 maximums were based on a more generous formula and, for most areas, higher median prices)
- Temporarily allow exchange of Low-Income Housing Tax Credit allocating authority for tax-exempt grants and it appropriates $2 billion in HOME funding for affordable housing projects
- Provide up to a 10-year deferral of tax due to business debt restructuring
- Expand the net operating loss carry-back period from two years to five years for small businesses (businesses with average gross receipts of no more than $15 million over the prior three years) for losses arising in tax year 2008
- Extend the 25C existing home remodeler credit through the end of 2010, increase the credit rate from 10% to 30%, raise the lifetime cap from $500 to $1,500 and expand the set of qualifying property
- Provide an Alternative Minimum Tax patch for tax year 2009
- Increase bonus depreciation and Section 179 small business expensing for business investment in 2009