How To Apply For Tax Credits As A New Home Buyer
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 the property sales.
The Tax Credit for Home Buyers law was initially approved in 2008 and was later on revised in 2009. With the recent developments in the economy, the 2010 administration revised the law in which it provided new rules in acquiring the tax credit.
The new home buyer tax credit approved in 2010 much is less stringent, allowing a more taxpayers to qualify for the credit needed to buy a new home. Below is a comprehensive summary of what this law is all about and what the requirements are in order to be eligible for the home buyer tax credit.
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.
Because the revised law is only applicable for the home purchases made after November 6, 2009, the 2010 tax credit for home buyers requires a proof of purchase with a properly executed settlement statement to their tax return or experience great inconveniences with government officials.
Because of the changes done for the law, the rules for home purchase tax credits are quite complicated even though the revision allows for less stringent requirements. This must be researched to the fullest extent in order to more smoothly purchase your first home. For a more help and a reliable reference, a comprehensive and detailed information on the topic can be found in 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.