Congress extends & expands first time buyer tax credit
Posted in Uncategorized | By Blair Newman and Dave Emerson |
Breaking News! Congress has moved up the 2010 buying season!
Congress acted today, Thursday, 11/4/2009, to extend the$8,000 first-time home buyers’ tax credit until 4/30/2010, even expanding the credit to include many move-up buyers!
That should extend the current mini-boom in starter homes through the winter, but will probably result in a slowdown in April or May, maybe sooner!
Unlike the previous deadline, which required homes to close escrow by 12/1, homes now need only be “under contact” by April 30th and close escrow by June 30, 2010.
According to the Washington Business Journal, “The legislation also increases the income eligibility limits for the tax credit from $75,000 to $125,000 for individuals, and from $150,000 to $225,000 for joint filers. The cost of the home cannot exceed $800,000.”
The move-up buyer credit is a slightly smaller $6,500, and the same income and home price limits apply. To qualify, the buyer must have owned and occupied a primary residence for a period of at least five consecutive years in the previous eight years.
I’m still seeking clarification on two aspects of the move-up buyer program:
1. Must the buyer sell their current home to qualify, or can they rent it out?
2. Can the buyer’s new home be of less value than their current home? In other words, it the credit only applicable to buyers literally moving up in price, or could someone moving down or relocating take advantage of it? The best I can tell, the new home must cost more than the old one, but I haven’t found the specifics yet.
If you find the answer to either of these questions, please post them in a comment below, along with a link to your source.
The last extension?
There’s no guarantee the credit will be extended again. In fact, the ever growing federal deficit may make a further extension unlikely. Georgia Senator Johnny Isakson of Georgia stated the credit will not be extended further. However, 2010 is an election year for 1/3 of the Senate and all of the House, so anything could happen.
How’s that apply to me?
Sellers: This is going to be a different winter, with more activity than usual. If you want to sell in 2010, you’d be wise to be ready to hit the market early in the new year. It would be wise to contact a competent, experienced Realtor now to save time, money, and hassle in preparing and staging your home. (We can help you locate a good agent in your area–just use “Contact Us” link at the upper left corner of this page.)
Buyers also need to act fast to take advantage of an amazing combination of low interest rates, low prices, plus a big tax credit. We expect the spring buying season to be especially crazy this year, possibly with interest rates rising. Serious buyers should start their search now to get the best value and the least time pressure.
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