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First-Time Homebuyer Credit. First-time homebuyers (an individual who had no ownership interest in a principal residence during the 3-year period prior to the date the qualifying home is purchases) is allowed a refundable tax credit equal to the lesser of $7500 or 10% of the purchase price of a principal residence for purchases on or after April 9, 2008 and before July 1, 2009. The credit is recaptured ratably over 15 years with not interest charge, beginning in the second tax year after the year of purchase.
Property Tax Deduction for Non-itemizers. For tax years beginning in 2008 and for the 2009 tax year an individual’s standard deduction is increased by the lesser of 1) the amount of real property taxes paid by the taxpayer or 2) $500 ($1000 for a joint return).
Reduced Exclusion of Gain. As of January 1, 2009 gain from the sale or exchange of a principal residence that is allocated to periods of nonqualified use is not excluded from the gross income. A period of nonqualified use is any period beginning on or after January 1, 2009 when the property is not used by the taxpayer as a principal residence.
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