Here’s the Scoop on Recent Home Buyer Tax Credit Legislation
Nov 16, 2009 Tax Credit
There is terrific news for consumers looking into purchasing a home! Congress has recently passed further legislation, as a portion of the strategy for energizing the U.S. housing market, that makes the Federal tax credit of up to $8,000 now available to still more first-time buyers. Additionally, some individuals who presently own a home and would like to buy a new one may also be able to obtain a Federal tax credit totaling up to $6,500.
The Extended Home Buyer Tax Credit extends and improves the current law that runs out on November 30th. Both first-time and move-up buyers may now take advantage of the Federal tax credit. Of course, this is in addition to the current historically low mortgage interest rates.
Here are the new key provisions:
* The first-time buyers’ $8,000 has now been extended through the end of April, 2010. * Individuals who currently own a home are now eligible for a $6,500 tax credit, provided they have resided in the house they are selling as their principal home for at least five straight years within the last eight years. * The income limits for qualifying 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 added to make allowance for closing the home purchase. If they have a legal contract by April 30, they will subsequently have until the 30th of June, 2010, to close the transaction. The qualifying purchase price of the new home has to be $800,000 or less.
Additional details:
* Tax credits grant a dollar-for-dollar reduction of taxes owed with any surplus funds available as a refund. The amount of the tax credit will be first applied to any tax liability for the year of purchase. Then the amount remaining will be refunded to the buyer. (For example a first-time buyer who owes $2000 in taxes would receive a payment of $6,000). * Any single-family home purchased to be used as a principal residence (including condominiums, co-ops) will qualify assuming that it is purchased by the last day of April, 2010 and closed by June 30th, 2010. * The full amount of the tax credit is available for individuals with an adjusted gross income of no more than $125,000 or $225,000 on a joint return. Above those incomes, the amount of the tax credit is reduced until the upper limit is reached - $145,000 for individuals 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, Tri-Cities Area, Virginia, area properties for sale.
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