As we begin 2010, both real estate professionals and home buyers are "hitting the ground running" - anxious to take advantage of the extended and expanded home buyer tax credit.
Everyone I talk to in real estate is busier than usual for this time of the year. Buyers are anxious to make sure that they don't "miss the boat".
Originally created in 2008, the home-buyer tax credit has evolved from a $7,500 credit, which had to be repaid by the home buyer over the course of 15 years, to an $8,000 tax credit with no repayment required in 2009. Now, for a limited time in 2010, the $8,000 home buyer tax credit will still be available to first-time home buyers and certain current homeowners will also be eligible for a $6,500 credit.
Under the extended home buyer tax credit, as long as a written binding contract to purchase a home is in effect on April 30, 2010, and the deal is closed by July 1, 2010, one can claim the credit.
For current homeowners purchasing a home it is important to point out that the existing home does not need to be sold. One must, however, occupy the new home as a principal residence and do so for three years or risk recapture of the credit. Also, the new home does not need to cost more than the old home despite the concept that it is directed at "move up" buyers.
To better understand the extended and expanded home buyer tax credit, click here for more highlights of the changes.
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