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Update on the New Home Buyer Credits

By
Real Estate Sales Representative with W.C. & A.N. Miller Realtors, a Long & Foster Co.

Thankfully, the President signed the law extending the $8000 First-time Home Buyer Credit and adding a credit of $6500 for other "Repeat" Home Buyers.  Thanks to Scott Schaub of M-Point Mortgage Services for this summary of the new law:

$8,000 First-time Home Buyer Tax Credit at a Glance

•·   The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.

•·   The tax credit does not have to be repaid.

•·   The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.

•·   The tax credit applies only to homes priced at $800,000 or less.

•·   The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.

•·   For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.

•·   For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

•·   To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.

•·   The tax credit does not have to be repaid.

•·   The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $6,500.

•·   The tax credit applies only to homes priced at $800,000 or less.

•·   The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.

•·   Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

With interest rates at historically low rates, and the home buyer credits, it's an amazing time to buy a home.  Even if you can't sell your current home for what it might have sold for back in 2005, you'll save money on the new home and the closing costs on both selling your current home and buying your new home.  In most cases, it makes more financial sense to move now, and not in a couple of years when people believe home values will have risen slightly. 

I'm happy to run the numbers for you if you like.  I can tell you the probable sales price for your home, and the closing costs on both selling your home and buying a new home.  Please just call me at 301-717-1663 or email to Colleen.Barlow@LongandFoster.com .

Warmest regards,

Colleen Barlow, Realtor