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Changes in the Tax Break for New Pasadena Home Buyers

Changes in the Tax Break for New Pasadena Home Buyers

Last week, I wrote about the $7,500 tax credit when purchasing your new Pasadena home.

With the new stimulus package there have been some significant changes. The Housing and Economic Recovery Act of 2008 allowed first time home buyers to receive up to $7,500 tax credit which would then need to be repaid over the next 15 years.

Obama’s Stimulus package raised this amount to $8,000, BUT this tax credit does not need to be repaid.

Here’s a quick summary of the Stimulus Bill credit:

The tax credit in the Stimulus Bill has been scaled down to $8,000 from its previous level of $15,000, or 10% of the value of the home for any first time homebuyers who purchase homes from the start of the year until the end of November.

It starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000, and Pasadena home buyers will have to repay the credit if they sell their homes within three years.

Obama’s administration is still trying to come up with a new program to subsidize mortgages to fight the credit crisis. The plan would seek to help homeowners before they fall into arrears on their loans, whereas current programs only assist borrowers that are already delinquent. There are no details yet on this plan, but I will be monitoring this news closely in the weeks ahead.

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Posted on February 17th, 2009
Posted by: Irina Netchaev

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