First Time Home Buyer Tax Credit 2012
The First Time Home Buyer Tax Credit 2012
The news of the first time home buyer tax credit 2012 will accelerate the construction industry and will create a lot of new jobs. This is a temporary bonus for the first time home buyers which is worth up to $10,000, and will be effective until March 31, 2013. It is very difficult for the buyers to get into the market and generally to get help from the banks. So this will help the new buyers to get a home ownership and will help the construction industry for each home start, there will be about three full-time jobs every year.
The participation of tax credit is governed by eligibility guidelines. A good number of people are allowed to participate. Applicants will have to be a first-time home buyer and they are required to meet certain income criteria. The one time refundable personal tax credit is equal to 5% of the purchase price of the home to a maximum of $10,000. On basis of the net income of a buyer or couple the bonus will be reduced. For every dollar in net income over $150,000, the bonus is reduced by 20 cents for single people (it is zero at $200,000 net income). The bonus is reduced by 10 cents for every dollar in family net income over $150,000 for couples (it is zero at $250,000 net family income).
The bonus is based on homes where the HST is now payable which includes detached houses, duplexes, townhouses, condos, mobile homes, floating homes and cooperative housing units. This will help people to get into the market and to get new homes. The biggest hurdle of getting a new home is the down payment. The bonus of $10,000 is a great contribution toward the first-time new home buyers. The home buyer bonus is a good news for the home construction industry raising the HST-rebate threshold to $850,000. Housing is very expensive particularly in the lower Mainland and both measures together make it easier to consider a new home for people. The maximum $10,000 bonus for the first-time new home buyers will accelerate potential buyers to look for homes moving off the sidelines in lower Mainland in particular. The measures help lessen the cost of new homes at both ends. Approximately 13% of new homes are priced under $525,000 and 50% are priced between the $525,000 and $850,000 range.
There is no significant tax relief for the home renovation industry. More than $7.6 billion will be spent in home renovation, improvement and repair this year. People are delaying their decision to renovate their homes by waiting for the HST to disappear [on April 1, 2013]. The home renovation tax credit up to $1,000 will not have a great impact on the renovators.
The housing crisis and recession plagued the American economy in the last few years. The first-time home buyer tax credit 2012 is implemented as an incentive to purchase homes. A great deal of Americans will be benefited from the first-time home buyer tax credit 2012 and will take advantage of the $10,000 refund.
Construction Industry: http://en.wikipedia.org/wiki/Construction_industry
Tax credit: http://en.wikipedia.org/wiki/Tax_credit
Net income: http://en.wikipedia.org/wiki/Net_income
Down payment: http://en.wikipedia.org/wiki/Down_payment