Homebuyer Tax Credit Extended

Last week President Obama signed legislation that not only extended the first time homebuyer’s tax credit, but expanded the tax credit to some existing homeowners. Here are some high points:

1. First time homebuyers: As before, a tax credit of up to $8000 will be available for contracts signed and accepted by April 30, 2010 and closed by July 1, 2010. The definition of first time buyer remains the same, i.e. any buyer who has not owned a home for three years prior. The combined income limits have been raised from $75,000 to $125,000 for single buyers, and from $150,000 to $225,000 for married buyers. A new provision puts an $800,000 cap on the cost of the home.

2. Existing homeowners: New to this bill, buyers moving from an existing home to a new home may claim a $6500 tax credit, as long as the home being sold has been a principal residence consecutively for 5 of the previous 8 years. The buyer may move up or down in price with the new home, but the $800,000 cap on the cost of the home applies, as does the new combined higher income limits. As before, any buyers married but filing separately may claim half of the tax credit.

Wow! There has never been a better time to buy. The huge inventory of homes is begging to be bought at rock bottom prices and mortgage interest rates, and Uncle Sam keeps trying to help. Get together with a mortgage loan officer, get pre-qualified, establish your price range, and start your search. With such large inventories out there, make sure you work with a good local realtor who is familiar with the homes in the area.

Posted By: Julie Sarton

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