First-time Homebuyer Tax Credit

For those that are wondering about the First Time Homebuyer Tax Credit here is a response from Senator Isakson.

Dear Mr. Shaw:

I have worked with Senate leadership to extend and expand the current first-time home buyer tax credit, which was set to expire on November 30, 2009. This legislation, which passed the Senate on Wednesday, will extend the current $8,000 first-time homebuyer tax credit, as well as establish a new $6,500 tax credit for “move-up” buyers so long as the home they are leaving has been used as a principal residence for five years or more. Both the $8,000 first-time home buyer credit as well as the $6,500 credit for “move-up” buyers will sunset on April 30, 2010. However, individuals who have contracts to buy a home as of April 30, 2010, will still qualify for the credit so long as they complete the transaction within 60 days. Tax credits such as this only work by creating the sense of urgency to take advantage of them, bringing people back to the marketplace. So this is a unique opportunity because this is the final extension of this tax credit. Congress will not continue this tax credit past April 30, 2010.

I am pleased the new home buyer tax credit contains strong anti-fraud language that gives the IRS the authority to do greater oversight during the processing of the return rather than waiting for an audit situation and requires the taxpayer claiming the credit to be 18 or older. Another new provision is designed to help our brave men and women of the Armed Forces. The legislation states that home buyers would not have to repay the credit, provided the home remains their principal residence for three years after the purchase date. However, this would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on extended duty. In addition, members of the military who have been deployed overseas for 90 days or more in 2008 or 2009 would have until April 30, 2011, to claim the home buyer tax credit.

Additionally, I realize cost is a great concern as our nation faces unprecedented debt levels. During negotiations on this tax credit, I insisted that the extension and expansion be paid for so that it will not add to our debt.

I believe home sales not only stabilize the housing market, they boost our overall economy. Research shows each home sale has a positive economic impact on our overall economy. By restoring Americans’ equity in their homes, we increase American consumer confidence and optimism. I believe this tax credit will swiftly help our economy get back on track.

Sincerely,
Johnny Isakson
United States Senator

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