The New and Improved Home Buyer Tax Credit
The much-anticipated extension to the home buyer tax credit has finally been approved. The President signed the extension into law last month.
If you are looking to purchase your first home, you have been eligible for tax credits of up to $8,000 since last January as part of this year’s economic stimulus package. You will continue to be eligible in the “new and improved” program to be eligible for a tax credit of up to $8000. The big news is that the newly backed program will expand the credit to include existing home owners. One of the great successes of the original credit was the number of first time buyers who took advantage of the program, now hopefully this can encourage more than just first time buyers to act.
Under the revised program, those who have owned a home for at least five years will be eligible for tax credits of up to $6,500 when they purchase their next home. To qualify, buyers will have to sign a purchase agreement by April 30, 2010 and close by June 30, 2010.
Thanks to http://www.flickr.com/photos/chrisgriffith/ for the great photo
Here are some quick eligibility guidelines:
- The maximum purchase price of the home must be less than $800,000 (not just the mortgage amount) and it must be the tax payers principle residence.
- Home buyers must make less than $125,000 yearly for single tax payers and $225,000 yearly for joint filers.
- For current home owners looking to purchase a new home, they must have occupied their current home for 5 of the past 8 years and they do not have to sell their current home to be eligible for the tax credit.
To determine if you are eligible for the tax credit you should seek the counsel of a qualified tax professional as you should be any tax questions. A great website on the tax credit can be found at http://www.federalhousingtaxcredit.com.
The National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) have been lobbying hard for the extension and expansion of the tax credit. NAR claims that so far, about 1.4 million first-time homebuyers have qualified for the program and they estimated that 350,000 of these buyers would not have otherwise purchased.
Do you know anyone in the armed forces currently serving outside the United States? In a nice move for military personnel serving outside of the United States the tax credit has been extended until June 30, 2011 for them.
Take advantage of the new and improved tax credit for both first time buyers and current home owners along with historically low interest rates. That combination makes today a great time to buy a home.
