Tax Credit until April 30!

There has never been a better time to buy a home! In most markets affordability is high and there is an abundance of inventory. Congress has expanded the Tax Credit as part of a plan to stimulate the U.S. housing market and address the economic challenges facing our nation. New legislation has been passed extending the tax credit to help first-time buyers (and existing homeowners) purchase a home.

If you qualify and buy a principal residence before April 30, 2010, then you are eligible for the credit - allowing you to subtract 10% of the purchase price of your home, up to $8,000, from your tax bill. FHA has changed the rules to make this money available to you at closing. As with most tax issues, there are caveats and qualifiers, but the table below should make it easier to understand. Please call us with any questions you might have!

Homebuyer Tax Credit - Revised November 2009

Effective November 7, 2009 - April 30, 2010

First-time buyer, amount of credit: $8,000 ($4,000 married, filing separate)

Definition of First-time Buyer: May not have had an interest in a principal residence for 3 years prior to purchase

Current Homeowner Amount of Credit: $6,500 ($ 3,250 married, filing separate)

Effective Date, Current Owner: November 7, 2009

Current Homeowner, Definition for Eligibility: Must have used the home sold, or being sold, as a principal residence consecutively for 5 of the previous 8 years

Termination of Credit: Purchases AFTER April 30, 2010

Binding Contract Rule: So long as a written, binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close

Income Limits: $ 125,000 Single, $225,000 Married

Limitation on Cost of Purchased home: $ 800,000 November 7, 2009

Purchase by a Dependent: Ineligible

Anti-fraud Rule: Purchaser must attach documentation of purchase to tax return

Other tax benefits of homeownership are still in place. The mortgage interest deduction, capital gains tax exclusion, and property tax deduction are some well-known examples.

Let us know how we can be of service! Low interest rates, inventory, and price stabilization give people looking to upgrade a unique opportunity to take advantage of market conditions.