Homebuyer tax credit recently expanded, extended
From:HAR Chair report
Last
month, President Obama signed a bill that extends and expands the
homebuyer tax credit. This year’s version includes the same $8,000 tax
credit, but has also undergone changes that make the program available
to a significantly larger pool of people.
The basics
First-time
homebuyers may qualify for a tax credit on their tax return of 10% of
the purchase price of a home. The maximum benefit is $8,000, which
means that any home above $80,000 qualifies the buyer for the full
amount of the credit. The purchase price cannot exceed $800,000.
This
is a true credit, meaning if you have a $3,000 tax burden and qualify
for the full amount allowed under the program, you’ll actually get
$5,000 back.
More time to act
The
program has been extended from the original deadline (November 30,
2009) to the new deadline – April 30, 2010. A signed contract must be
in place by that date.
The actual closing date can be as late as June 30, 2010.
More people qualify
The
two most notable changes are a substantial increase in the qualifying
income limits and the inclusion of a credit for current homeowners who
purchase a home.
The income limits have been stretched from
$75,000/year (single) and $150,000 (married) to $125,000 and $225,000 –
this means many more thousands of Texans are eligible for the credit.
What’s
more, unlike the previous program, the redesigned tax credit is not
just for first-time buyers. Eligible current homeowners may claim up to
a $6,500 credit for qualifying properties.
To take advantage of
the credit, homeowners must meet certain criteria, which can be a
little confusing. Let me provide some clarification:
If you have
owned and lived in a home for at least five consecutive years of the
last eight years and meet income requirements, you likely qualify for
the credit.
Here’s something interesting … you don’t have to
sell your existing home to take advantage of the credit. The home you
purchase must become your principal residence, so you would have to
move there. But you may be in a position to keep your original house as
a second home or rental property.
Paybacks
As
long as you live in the newly purchased home for three years before
selling it, the credit does not have to be repaid. A notable exception
is members of our military, who do not have to repay the credit if they
must sell the home or stop using it as a residence because of extended
duty.
In addition, service personnel outside of the U.S. during
any part of 2009 or early 2010 get an additional year to claim the
credit. In other words, in most cases, the program ends on April 30,
2010, but active-duty service members working overseas have until April
30, 2011 to have a signed contract.
Get your ducks in a row
If
you’re ready to buy your first house, or have been considering a
move-up, the time is right. You have a little time, but talk to a
Realtor soon. April 30 will be here before you know it.
Whether
you're interested in buying your first home, your next home, or just
want to know more about home-ownership in general, I encourage you to
check out a couple of great online resources: http://www.texasrealestate.com/ or http://www.har.com/ and for all of your Pearland TX and Northern Brazoria and Galveston County real estate needs, please visit my site at http://www.danfrankrealty.com/. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.
Danny Frank is a local Pearland TX Real Estate expert! You can see my entire blog at http://www.pearlandrealtyblog.com