Denver home buyers as well as the Realtors who would love to represent you are delighted that the $8,000 homebuyer's tax credit has both been extended until April 30, 2010 PLUS has been expanded to include repeat buyers. Current homeowners can qualify for up to $6,500. The maximum home value is $800,000.
For first time home buyers, this is particularly great news if you've been looking at homes and maybe even found one, only to realize that you won't get the deal done by November 30, the old deadline. (If you have a deal in progress, the needed completion date now will conform to the new rules.) If you've been thinking of buying but have been trying to do some last minute credit repair, been trying to build your down payment, or been unsure of whether to take the plunge, you have another chance. Now, that worry is gone and you will officially have more time to prepare.
If you are a current homeowner, now is your chance to move to a bigger home with a little government assistance. You can now receive up to a $6,500 tax credit. This credit is designed to aid homeownership, not reward house flipping, so you must have owned a home used as a primary residence for at least five of the last eight years. However, if you lived in a home for five years, sold it, and then either bought another house or rented for three years, you would still meet the qualifications to get help buying your new Denver home. This give a lot of flexibilty to people who have been transferred a lot or been divorced and made alternate living arrangements the past few years.
Though the credit expires April 30, 2010, the credit has a contingency that offers a few extra months to close. As long as you have a binding contract in place by April 30, 2010, you have until July 1, 2010 for all the details to be completed and the transaction closed. This means you can make offers on homes until the last minute - although doing so could backfire if another buyer snaps up your dream home while you are thinking. It even gives you an opportunity to buy a new home that might not be ready by the end of April but will be ready by July 1
The new law allows you to claim the credit with higher income levels than in the past. Now, you can earn the full credit if your income is $125,000 if you are single or $225,000 if you are married. If you make up to $20,000 more than that, the credit phases out.
The new bill requires you to attach documentation of your purchase to your tax return. You cannot apply for the credit without actually making the purchase. Whether you make a mistake based on plans that fell through or purposely try to put one over on Uncle Sam, the IRS will not be amused. This new requirement is in response to rising cases of fraud by non-qualifying home buyers who tried to use the credit without buying a home.
According to the National Association of Realtors (NAR), two million people will take advantage of the credit by year's end. The credit has contributed $22 billion to the economy and is credited with stabilizing the housing industry. In parts of the country, housing prices are increasing and housing inventories are decreasing. NAR estimates that 350,000 sales would not have occurred without the credit.
Though sales have decreased somewhat in Denver since January, 2009 when distressed properties are included, sales of non-distressed homes have increased 7%. In Denver, as elsewhere, inventories of lowered priced homes are lower than more expensive ones. Even though the credit provides more time, those who shop early will get the best selection. The Bandy Team can help you find your first or your next home in the Denver metro area, whether you have set your sites on Cherry Creek, Castle Rock, or Stapleton,