It’s going to be a very happy holiday season now that the bill that includes the First-Time Homebuyer Tax Credit extension and the new Current Homebuyer Tax credit was signed into law by President Barack Obama on Friday, November 6! Best of all, it’s effective immediately!
The bill extends the existing $8,000 tax credit for first-time homebuyers, plus adds a new credit for current homeowners of up to $6,500.
Current Homeowners can qualify for $6,500 Tax Credit
The new $6,500 tax credit for current homeowners is by far the most exciting portion of the bill, giving some much needed assistance to homebuyers looking to move up to a larger home or relocate to a new area. To qualify, current homeowners must have lived in their home as their principal residence consecutively for 5 of the previous 8 years.
This means that even if a homeowner is currently renting, but moved out of a home they lived in and owned for five years within the last three years, they are still eligible for the $6,500 Tax Credit. If they have been out of their home for three years or longer, then they are eligible for the $8,000 Tax Credit!
Tax Credit details
For both credits, homebuyers must have an accepted sales agreement in hand by April 30, 2010 and close no later than June 30, 2010 to be eligible to claim the tax credits. The extension is wonderful, but April 30, 2010 is not that far away. Extra time is required if the property selected is a short sale or foreclosure property. And current homeowners need added time to market and sell their existing home.
The new bill also expanded the income limits, effectively opening the tax credit to more buyers. Income limits have been raised to $125,000 for single taxpayers and $225,000 for joint taxpayers. Previously, they were $75,000 and $150,000, respectively. This is essential for the tax credit to reach as many homebuyers as possible.
Buyers who qualify don’t need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
Finally, there has been a maximum limit set at $800,000 for the cost of the home.
Exception for Military
The credit has been extended an additional year for military personnel that were deployed overseas for a minimum of 90 days in 2008 or 2009. In other words, the credit ends for everyone on April 30, 2010, except active-duty military working overseas. They have until April 30, 2011 to finalize a contract.
Homebuyers received an early holiday gift with this extended and expanded tax credit, and now it’s time to take advantage of it before it’s too late!
Do you know someone who qualifies? Share this great news with everyone you know.
Tags: $6500 tax credit, $8000 tax credit, atlanta real estate, current homeowners, first time homebuyers, homebuyer tax credit extension, HR 3548, Judy Jones, Metro Brokers Financial, military extension, military tax credit, Worker Homeownership and Business Assistance Act of 2009