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First Time Home Stimulus Plan Extended

Owning a home became totally out of the question for many people who were affected by the economic downturn. The cost of the house plus taxes made this an unachievable project for many families. Since having ones home is so important for many people President Obama came out with the First Time Home Buyer Stimulus Plan, which made it more viable for people to own their own house.

This plan provides to an individual who is buying a house for the first time, a tax credit of $8000 or 10% of the price of purchase, whichever is less. The term tax credit means that this amount does not have to be paid ever. The individual can just deduct this full amount from his total tax liability. There is a condition that once you have claimed this deduction you cannot sell the house for three years after the purchase date.

To qualify as a first time home buyer for this stimulus package you should not have bought a primary residence for a period of three years prior to the current purchase. If you are married the same condition applies to your wife as well. So if your wife has purchased a primary residence in the past three years you cannot claim the tax credit. A vacation house is not considered a primary residence and so if you own one you can still get the tax credit if you purchase a house as a primary residence.

The First Time Home Buyer Stimulus Plan was initially having a purchase deadline of 1st December 2009 and now this has been extended to 30th April 2010. So now a person can claim the tax credit if he has bought the house between 1st January 2009 and 30th April 2010. There is a further consideration given to sales which are completed by 30th June 2010, if the contract has been signed and completed by 10th April 2010.

The First Time Home Buyer Stimulus Plan which was extended also amended the income limits clause. In the initial stimulus package the limit of an individual’s income had to be $75000 per annum, which is now raised to $125,000. For a couple the limit was $150,000 which is now raised to $225,000.

The First Time Home Buyer Stimulus Plan extended has much more good news to offer. Members of the Intelligence community, Armed services or Foreign Service, who are serving outside the country, have their purchase deadline extended to 30th April 2011.

One of the major reasons for the economic crisis was the slump in the real estate market and President Obama has extended the First Time Home Buyer Stimulus Plan to boost the housing industry. This can be the best time to buy a house as the prices are relatively less and you get a tax credit on top of that. These incentives may not be extended further as the real estate market will soon pick up and hence it is not wise to procrastinate in this matter.

Tags: credit, deduction, Income, market, price, Stimulus, tax

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