HOMEBUYER TAX CREDIT: EXTENDED & EXPANDED By: K. Hale Chamblee
The unquestionable and favorable influence of the First-time Homebuyer Tax Credit on the housing market, and therefore the economy, had many, including the National Association of Realtors, lobbying for an extended and expanded bill that would benefit a greater number of potential buyers for a longer period of time, and that’s just what we got!!
Under the Extended Homebuyer Tax Credit, first-time buyers can still receive a maximum $8,000 tax credit on houses purchased until April 30, 2010. PLUS the bill has been expanded to include up to a $6,500 tax credit for existing homebuyers that purchase a new or exisiting between now and April 30, 2010.
In order to qualify as first-time buyers, the purchaser and his/her spouse cannot have owned a home during the 3 years prior to purchase. Existing homebuyers must have used the home being sold or vacated as primary residence consecutively for 5 of the last 8 years.
Extended eligible properties are primary residences, including: single-family homes, town homes, condos and co-ops. (Sorry folks, no second homes)
Qualifying properties must have a contract to purchase by April 30, 2010 but have until July 1, 2010 to close, and there is no need to re-pay the tax credit so long as buyers occupy the house for 3 years or more.
The tax credit is determined by:
The price of the home, which cannot exceed $800,000 and,
The buyer’s income. Income caps have been increased since 2009 and the new Extended Homebuyer Tax Credit limits are as follows: in order to receive the maximum allowable tax credit for a particular purchase price an individual can make up to $125,000 annually, and married couples up to $225,000 annually. A partial tax credit is available to those making up to $145,000 annually as individuals, and couples making up to $245,000 anually.
In other good news, the loan limits will not shrink and remain at $730,000 giving buyers in high priced markets the opportunity to take advantage of the historically low mortgage rates.
There are a whole bunch of projections on just what this is going to do to further help the economy, but I’ll save those for the next entry. In the meantime, whether you’re in the market for your first home, need a bigger home for your growing family or are ready to down size – get in touch to see how we can make this amazing opportunity work for you!