Many of us interested in buying a home have been put off by the uncertainty of these economic times and the housing market itself. Frankly, the time to buy a home is NOW! Not only is housing inventory high right now, but there has been an extension of the government incentive of First Time Home Buyer Tax Credit. In fact, it has been expanded to include current homeowners as well.
The definition of a first time homebuyer is somewhat liberal. The purchase must occur between November 7, 2009 and April 30, 2010 and the maximum allowable credit for first time homebuyers is $8,000. In order to qualify, the buyer (or spouse) must not have owned a home in the past three years. Single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the tax credit. If income exceeds these amounts, some buyers may still be eligible for the credit. The amount of the credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and $245,000 for homebuyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Homebuyers earning more than the maximum qualifying income – over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
There’s also good news for current homeowners, wishing to purchase a new or existing home between November 7, 2009 and April 30, 2010. If those current homeowners have used their home being sold or vacated as a principal residence for five consecutive years within the last eight, they are also eligible for up to a maximum $6,500 in tax credit.
Not only is the tax credit available on single family homes, but also on other primary residences such as condos, townhomes and co-ops purchased for $800,000 or less. As 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 and still qualify for the credit. The credit does not have to be repaid if he/she occupies the home for three years or more. However, if the property is sold during the three year period, the full amount of credit will be recouped on the sale.
The above information should instill enough confidence in some of us to help us get off the fence we’ve been sitting on. The buyers’ market we’re in right now won’t last forever and neither will the enticement of the Extended Home Buyer Tax Credit. Now, more than ever, is the time to consider that home you’ve wanted or needed!
