FIRST TIME HOME BUYER TAX CREDIT update: GOOD NEWS:)

This post is about Federal first time Home Buyer tax credit.

update:Read my latest post on $8000 first time home buyer tax credit-details explained for latest updates.

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Latest News on housing tax credit: US house of representatives has approved Obama's economic stimulus package of $789 billion. The republicans did not block the economic stimulus plan. This is good news and a significant development, because the earlier version of this stimulus plan was blocked by the republicans. Part of this new stimulus package, provides a $8000 housing tax credit for first time home buyers. This housing stimulus is designed to boost the ailing US housing market. The original stimulus package had a proposal for a $15000 housing tax credit. But unfortunately the earlier verstion with $15000 tax credit had to be rolled back to a version with $8000 tax credit in order to get majority support. Previously a $7500 housing tax credit was available to first time home buyers was $7500, so this housing tax credit is still $500 more than the previous one. Note that the senators are yet to vote on the economic stimulus package and then later it will be signed by the president into a law (on 16th February).

Explaination - How does the $8000 home-buyer tax credit work?
Important things every home buyer must know about the $8000 housing tax credit.

1. Difference between $7500 tax credit and $8000 tax credit: Unlike the $7500 tax credit this $8000 tax credit does not need to be repaid back. The $7500 tax credit was essentially an 'interest free loan' for 15 years. It is still not clear whether this is a refundable credit. A refundable tax credit means that in case the total taxes you pay to IRS are less than the tax credit, then you can actually get a refund for the difference from IRS!
   
2. Available to only first time home buyers: The 1st time home buyer tax credit, as the name suggests is available only first time home buyers. If you have already bought a house before, there is no tax benefit or tax credit for you.
   

If you have any further questions you may visit First time Home Buyer Tax Credit update or I encourage you to leave a comment. I will update the exact income limits and other details about the $8000 home buyer tax credit after the bill is signed into a law.