Tax Credit

With the nation’s unemployment rate busting through the 10% (11% for South Carolina) mark in October, President Obama on Friday signed legislation extending the $8,000 first-time home buyer tax credit and giving additional tax breaks to certain homeowners trading up. Passed overwhelmingly by Congress, the bill will provide a $6,500 tax credit to homeowners who are buying a new primary residence beginning Dec. 1.

The language mandates that to get the credit the homeowner must have owned their home for five consecutive years of the previous eight. But there are caps on the tax credits. They only apply to individual buyers who make no more than $125,000 and $250,000 for couples. There is also an anti-flipping provision: Any homeowner who collects the credit and sells within three years must return the money. The FTHB was extended to cover consumers signing a contract by April 30 and closing by June 30.