The homebuyer tax credit has been extremely successful and has really had a positive impact on the real estate market. Hundreds of thousands of homes have been sold as a result of buyers taking advantage of the tax credit. The credit was scheduled to expire on November 30th but has been extended and expanded! The new credit will be good thru April 30th! Here are some of the specific details:
The rules for the First Time Buyer Credit are mostly the same with a couple of variations. If an individual or couple has not owned a home in the preceding 3 years they are considered first time buyers. They would receive 10% of the sales price up to $8,000. The home being purchased must be a primary residence (no investment properties or second homes). Income limits have increased to $125,000 Single and $225,000 married. Also, there is now a limit on the cost of the new home and it is set at $800,000. The other change is that the credit is good for buyers who sign a purchase contract prior to April 30, 2010 but now you don’t have to close until June 30, 2010. So, as long as you have a fully executed contract prior to April 30th you’ll get the tax credit as long as the closing takes place by June 30, 2010!
New Tax Credit for Existing Homeowners Who Purchase a New Home! This is great news. The tax credit has been expanded to include people who own a home and want to buy a new one! If you own a home and have occupied it as your primary residence for 5 of the past 8 years and you purchase a new primary residence then you may qualify for a tax credit of 10% of the purchase price of the new home up to a limit of $6,500. You have to have a fully executed purchase contract between the date the President Obama signs the new bill into law (should happen in the next couple of days) and prior to April 30, 2010 to qualify. Otherwise, the rules are the same as the first time homebuyer tax credit.
This opens the door for a whole bunch of homebuyers to get a big fat check just for buying a house! If you’re interested in buying your first home or would like to upgrade your existing home now is the time to take action. Mortgage rates are low, homes are selling at great prices and combine these factors with a big tax credit and you have to conclude that there has never been a better time to buy a house.