Ro Troia

Homebuyer Tax Credit…Extended AND Expanded

Recently I was showing homebuyers around Boulder Colorado and they made an interesting comment about it being unfortunate they missed the deadline for the tax credit and they don’t qualify because this wasn’t their first home.  Just when I thought EVERYONE knew about the homebuyer tax credit!  I was quick to correct them and reassure my new clients that they can indeed still benefit from this one-of-a-kind credit.  Read more and you too can reap the rewards of homeownership in 2010!  It is a buyers market and this is opportunity should not be missed.  A fantastic time to buy!  The time to buy is now.  Ok, I think you get my point.  Get the details….

The newest provisions are aimed at broadening availability of the credit and giving the weakened real estate market a bigger boost while preventing real estate investors from being the only ones benefiting.  Many real estate experts have cited the credit as a reason for signs of recovery in the housing market late last year and hope to see another recovery in the near future because of the expansion of the credit.

The deadline was moved from November 30, 2009 to April 30, 2010, with any contracts closing before July 1st.

The other basics include:

1) The amount of the credit is $8,000 (4,000 if married and filing separately).

2) The definition of eligibility is that you may not have had an interest in a principal residence for 3 years prior to purchase.

3) Now the current homeowner amount of credit is $6,500 ($3,250 if filing separately).  The new legislation extends the credit to long-time residents of the same main home if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. For long-time residents claiming the credit, the IRS recommends attaching, in addition to the documents described above, any of the following documentation of the five-consecutive-year period such as mortgage payments, etc.

4) The income limits were increased from $75,000-$125,000 for single households, $150,000-$225,000 for married couples.

5) There is now a limitation on the cost of the purchased home of $800,000.

6) An anti-fraud rule is now enacted so simply attach the documentation of purchase to your tax return.

To summarize, frequently asked questions regarding the tax credit include:

1) Who is eligible to claim the $8,000 tax credit?  Answer: First-time home buyers are eligible who are buying any kind of new or resale home. The dates of purchase must be after January 1, 2009 and before April 30, 2010.  To clarify, the purchase date of the home is the day it closes and the property transfers to the new homeowner.  There is an exception; if a home goes “under contract” before or on April 30, 2010 and closes by June 30, 2010, you get the credit.

2) What is the definition of a first-time home buyer? Answer: To receive the credit, you and your spouse must not have owned a home in the last three years.

3) Are there income limits?  Answer: According to the National Association of Home Builders the income limits for sales occuring after November 6, 2009 are $125,000 and $225,000 (single and married limits).

Would you like to buy now when its a buyers market and benefit from the tax credit, low interest rates, and low home purchase prices?  Call me and I’ll walk you through the home buying process.  The tax credit is an incredible opportunity.  Don’t wait and take advantage today.

Tags: Tags: boulder, colorado, expansion, extension, first time homebuyer, homeownership, National Association of Homebuilders, real estate experts, real estate market, tax credit

This entry was posted on Sunday, February 14th, 2010 at 2:03 pm and is filed under Buyer's Corner, First Time Buyers, Market Conditions, Market Watch, Selling Thoughts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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