The first-time home buyer tax credit, that Realtors have reported jump-started home sales this Summer and Fall, but due to expire at the end of this month, has been extended through April 30, 2010 by Congress and is on its way to President Obama for his promised signature.
The extension expands eligibility for the home buyer tax credit to people with higher incomes as well as to people who have already owned a home for at least the past five years. In either case, the buyer must sign a purchase contract on or before April 30, 2010 and close on the purchase by June 30, 2010. The $8,000 maximum first-time buyer tax credit will continue but will now be available to individuals with incomes up to $125,000 and joint filers with annual incomes up to $225,000. Home buyers with incomes up to $145,000 and couples with incomes up to $245,000 will be eligible for somewhat reduced tax credits.
Under similar income limits, a $6,500 maximum tax credit will be available to people who already own a home and want to move up to a larger home.
Under the new income limits, two-thirds of all American families owning a home today may be eligible to buy a new home. While buyers will not be required to sell their current home to qualify, the tax credit must be used to buy a new "primary residence", not a vacation home or investment property.
To keep speculators out of the program, people who claim the credit but then sell the home or no longer use it as their primary residence within three years will be required to repay the credit. The intent is to exclude from the program speculators who might purchase a home intending to flip it for a fast profit, according to Max Baucus, chairman of the Senate Finance Committee.
Here's a "heads-up" to those who may have considered buying a first home under the prior program but didn't quite get around to it.
"Contact a Realtor and get started now. You only have until April 30, 2010."
Congressional legislators in both houses have indicated that this costly part of the stimulus program will not be extended a second time. Critics point out that only about one-fourth of the homes purchased under the prior program would not have been bought anyway without the costly tax-credit program. There are also concerns that the previous tax credit program encompassed high numbers of fraudulent transactions. In this version of the program, the Internal Revenue Service has been given much wider authority to oversee the process to root out fraud.
If you are considering buying a first home or moving up to a larger home in the Tampa Bay Florida area I invite you visit my Tampa Real Estate website or for more immediate service, contact me by phone at 813-263-6806. I would be delighted to answer any questions you have.
