First time home buyers tax credit
The first-time homebuyer tax credit was a refundable tax credit available to Americans purchasing their first home. The first-time homebuyer tax credit originally applied to home purchases by qualified first-time buyers from April 9, 2008 and July 1, 2009. However, the Obama administration extended the original deadline requiring the homeowner has signed the contract of purchase and sale before may 1, 2010, and I gave them time until July 1, 2010, to close the deal.
Breaking down the ‘first time home buyers tax credit
The first-time homebuyer tax credit went into effect from 9 April 2008, and allowed a tax credit for a certain percentage of the purchase price of the house for home buyers that have not owned a home in the past three years. The original tax credit implemented a credit of 10 percent of the purchase price, up to $ 7,500 that must be repaid within 15 years in equal installments. However, in the extended version of the tax credit increased to a maximum of $8,000 and removed the repayment requirement as long as the customer remained in the house for at least three years. The program ended houses, which were signed the contracts on may 1, 2010 and closed before July 1, 2010.
The first-time homebuyer tax credit only applies to buyers with an income below a set level. When the program began, individual home buyers was required to have a modified adjusted gross income (Magi) or $75,000 up to 95 000 $and married couples filing jointly demanded the Magi of less than 150 000$. This limit is approached, since the program was closed in the end of the program in 2010, with an individual limit of the Magi in the amount of $125,000 and a total limit of $225,000.
The first-time homebuyer tax credit was claimed on the IRS (IRS) form 5405, first-time homebuyer credit and repayment of the loan.
The intention of first time home buyers tax credit
The bubble in the housing market in the early 2000-ies created by questionable practices in mortgage lending began to crack in the mid 2000’s and by 2008 the housing market was in trouble. The first-time homebuyer tax credit was created as a measure to help stabilize the real estate market is in decline as a result of the subprime mortgage crisis. With a wave of mortgage defaults and foreclosures, new home buyers are hesitant to enter the market and consumer confidence low. The first-time homebuyer tax credit was a simple stimulus, which helped to offset closing costs and moving costs to your place first time homebuyers in homes without increasing the risk either for housing or mortgage lender.