Joe Biden’s proposal for tax credits: Who could benefit from the president’s plan?
In an attempt to boost the housing market, President Biden has created a new proposal on tax credits worth up to $10,000. Who would benefit from the plan?
Americans have been grappling with difficulties in acquiring a new home because of high mortgage rates, steep home prices, and low inventory. In an attempt to boost the real estate market and provide relief to prospective homeowners especially first-time buyers, President Joe Biden launched a proposal to provide new tax credits.
The initiative was presented last week during the State of the Union address, the annual speech given by the president to Congress to report on the current situation of the country and propose new legislation to improve it. The tax credit for home buyers was included in these proposals. Who stands to benefit from the new measure?
Joe Biden’s proposal for tax credits: Who could benefit from the president’s plan?
There are currently two proposals related to home ownership from President Biden. The first is to offer a $10,000 tax credit for first-time home buyers, while the second covers a one-year tax credit of up to $10,000 for those who want to sell their starter home and purchase a new one.
Both credits are aimed at middle class families, with the household annual income limit set at $200,000 or less. As a Biden administration official explained to CBS MoneyWatch, first-time home buyers would qualify for a tax credit of $5,000 per year for two years, resulting in assistance of $10,000.
The second proposal would be available to people who already own a home below the median price in their county. For the tax credit to be valid, homeowners would need to sell their residence to another would-be owner. This benefit is aimed at people who feel locked in by their low mortgage rates.
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When can you claim the new mortgage relief tax credit?
Both initiatives are still in proposal status, so there is no date that has yet been set to claim the credits. For this benefit to become a reality, Congress would have to approve legislation to modify the tax code.
At the moment, specific eligibility requirements to apply for the mortgage relief credits have not yet been announced by the White House.
The Biden Administration has already asked Congress to approve the measure this year, so that interested parties can claim the credit beginning fiscal year 2024.