tax credits

The New Home Owner Tax Credit is Getting Extended!

The first-time home buyers tax credit ($8000 for most of the people in the area), which was scheduled to expire November 30th, has been extended to include sales for contracts which are written by April 30, 2010 and closed prior to July 1, 2010. The credit has also been expanded to make more even more people eligible. Most urgently, new buyers are now eligible for up to a $6500 tax credit, assuming that they have been owners for at least five years.

This tax credit will be expiring just as the market tends to get hot. As a result, we should see a speeding-up of the spring market, as new buyers rush to capitalize on the tax credit. If you plan to list your house this spring- act fast to be sure you can take advantage of this opportunity. It\’d be a shame to miss out on this one-time-only rush for homes.

Homebuyer Tax Credit Basics

* Tax Credit: Equal to 10% of the sales price up to a maximum of $8000 for first-time home buyers/ $6500 for move-up buyers.

* First-Time Home buyer: Individuals who have not owned a home for the past three years.

* Move-Up Buyer: People who have lived in their current home for 5 of the past 8 years.

* Income Restrictions: Individuals with an adjusted gross income up to $125,000/ $225,000 if filing jointly. The credits are phased out for people making between $125,000 and $145,000 and joint filers with income between $225,000 and $245,000. For instance, an individual first-time home buyer with a salary of $135,000 would qualify for up to a $4000 tax credit (half of $8000).

* Eligible Properties: Any condo, townhome or single-family home to be used as a primary residence with a maximum sales price of $800,000.

* Deadline: Contracts must be written by April 30, 2010 and closed by July 1, 2010.

Eddie Baum owns a blog about the coolest Arlington Condos, especially Courthouse condos and Clarendon condos

tax credits

The Latest News About Recent Home Buyer Tax Credits

There’s wonderful news for people considering purchasing a home! Congress has recently passed further legislation, as a portion of the plan for energizing the U.S. housing market, that makes the Federal tax credit of up to $8,000 now available to even more first-time buyers. Also, selected individuals who now own a home and want to purchase a new one will also be eligible for a Federal tax credit totaling up to $6,500.

The Extended Home Buyer Tax Credit extends and improves the existing law that runs out on November 30. Both new and move-up buyers can now take advantage of the Federal tax credit. Needless to say, this is over and above the current historically low mortgage interest rates.

Here are the important new particulars:

* The first-time buyers’ $8,000 has now been extended through April 30th, 2010. * Current homeowners are now eligible for a $6,500 tax credit, if they have lived in the home they are selling as their principal residence for a minimum of five consecutive years out of the last eight years. * Income limits for eligible buyers were increased to a range of $75,000 to $125,000 (for single buyers) and a range of $150,000 to $225,000 for couples. * Time has been extended to make allowance for closing the home purchase. As long as they have a ratified contract by April 30th, they will then have until June 30th, 2010, to close the purchase. The qualifying purchase price of the new residence has to be no more than $800,000.

Additional details:

* Tax credits provide a dollar-for-dollar reduction of taxes owed with any surplus funds available as a refund. The amount of the credit will be first credited toward any tax liability for the year of purchase. Subsequently the amount remaining will be refunded to the buyer. (For example a first-time buyer who owes $2000 in taxes would receive a check for $6,000). * Any single-family home purchased to be used as a principal residence (including condos, co-ops) will qualify assuming that it is purchased by the 30th of April, 2010 and closed by the 30th of June, 2010. * The full amount of the credit is available for individuals with an adjusted gross income of no more than $125,000 or $225,000 on a joint return. When income is greater than these figures, the amount of the tax credit drops until the maximum limit is reached – $145,000 for an individual or $245,000 of joint income.

Jim Navary has been a freelance writer and researcher for more thirty years covering a broad range of topics. He is also a licensed real estate salesperson in the Commonwealth of Virginia specializing in real estate in the Tri-Cities area of Virginia and, in particular, Petersburg, Virginia, area houses for sale.