Monday, 30 November 2009
In recent weeks, the federal government moved to extend the deadline for an $8,000 credit to first-time homebuyers, and simultaneously introduced a new $6,500 credit for repeat homebuyers. Both credits have actual cash value and represent checks made payable to consumers from the IRS in the form of a tax return. Here are the details:
Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers who purchase between December 1, 2009 and May 1, 2010. First-time homebuyers are defined as people who have not owned a primary residence in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.
Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.
Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.
Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.
How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.
New anti-fraud limitations imposed.
Contact your local real estate expert to learn how this credit can apply directly to you, and please feel free to forward this important news to eligible first-time home buyers and people looking to change residences. With only five full months to take advantage of this credit, smart buyers will want to begin learning about the details, looking into lending options and initiating a property search right away.
Sellers should also take note -- this credit will create additional demand between now and April 2010. If you have been waiting until spring to list your property, you might want to capture these buyers by moving ahead immediately, instead.
