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On February 13th, the United States Congress passed the $787 billion American Recovery and Reinvestment Act of 2009 (often referred to as the "Stimulus Package"). Congress was most concerned about addressing jobs, real estate, and credit availability. The Stimulus Package contains $308 billion in appropriations spending, including $120 billion on infrastructure and science and more than $30 billion on energy-related projects. Also included in the package is $267 billion for direct spending, including increased unemployment benefits and food stamps. The package also provides for $212 billion in tax breaks for individual tax payers and businesses.
Real estate will get a big boost by the resetting of conforming loan limits to $729,750, up from $625,500 in the designated high-cost areas. The bill also contains a first-time home buyer tax credit of 10% of the purchase price, up to $8,000. If a first-time home buyer purchases a home for at least $80,000 between January 1st and December 1, 2009, he/she will receive an $8,000 tax credit-even if his/her federal tax liability for 2009 is less than $8,000. In essence, a taxpayer could have a tax liability of $5,000 and receive all of his/her contributions back, along with an additional check from the government for $3,000. A first-time home buyer is defined as someone who has not owned a home for the three years prior to the close of escrow on the qualifying home.
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