Mike Long/Long Realty » Tax Credit Extended and Expanded Beyond First Time Buyers with Higher Income Limitations!!

Tax Credit Extended and Expanded Beyond First Time Buyers with Higher Income Limitations!!

November 6th, 2009 by Michael Long
Categories: Front Page, Things You Should Know

It is looking pretty good that the first time home buyer tax credit of $8,000 will be extended past the original December 1, 2009 deadline. All we need now is the President’s signature (UPDATE: President has officially singed the bill) and we have an extension of the bill through mid-year 2010. On top of that there are a few changes in the bill, namely increase in income limitations and a second credit for homeowners who have owned and lived in their home for 5 years or more. Here are the details:

First time home buyer credit of $8,000. Must be under contract by April 30, 2010 and close by July 1, 2010.
Income limitations: $125,000 for individuals (up from $75,000) and $225,000 for couples (up from $150,000). There is a $20,000 “phase-out” meaning if you make $135,000 you would qualify for a portion of the tax credit bu not all of it. If you make more than $145,000 individually or $245,000 as a couple you DO NOT QUALIFY.
A new $6,500 tax credit for homeowners who have lived in their home for 5 years or more. Same limitations on income as above. You must have lived in the home for 5 CONSECUTIVE YEARS OR THE PREVIOUS 8 YEARS.
Existing home buyer credit follows same rules where you must be under contract by April 30, 2010 and close by July 1, 2010. Think of it this way: you can close by July 1, 2010 but if you went under contract on May 22, 2010 YOU DO NOT QUALIFY AS THE CREDIT HAS TECHNICALLY EXPIRED.
To qualify as a first time home buyer you must have not owned a home in the past three years. So if you close on April 3, 2010 to qualify you must have not owned a home on or after April 3, 2007.
PURCHASE PRICE OF HOME MUST NOT EXCEED $800,000. THEY WILL BE VERY FIRM ON THIS DOLLAR AMOUNT!
A lot of fraud has come with the current first time home buyer credit…thus more documentation will have to be sent in with the tax credit form. I believe we’re talking RESPA statement and executed contract.
Once this is singed by President Obama it will be as if teh old tax credit never existed as far as moving forward. That $6,500 tax credit for those in there home more than 5 years will apply even to those currently under contract.

A few resources with good information on the tax credit changes:

NAR Tax Credit Changes Worksheet

FAQ for Home Buyer Tax Credit Changes

That is great news. I have been reading how effective the existing credit has been and am glad that both sides of the aisle have seen the importance of passing these new credits. They have always said how important it has become to get the housing industry back on its feet and this is a step towards accomplishing that. If you have any questions don’t hesitate to contact me. Excited about the tax credit and ready to start searching?? Take advantage of the PROPERTY SEARCH on this very blog. No registration is required and it is a pretty sweet search tool. Take advantage of it now!!

This entry was posted on Friday, November 6th, 2009 at 8:07 am and is filed under Front Page, Things You Should Know. 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.