Does the New Tax Credit Extension Have Your Name on it?
We sighed, waited and hoped for an extended version of the $8,000 New Homebuyer Tax Credit and low and behold Congress heard our requests. We have until June 30, 2010 to close on a home.
Not only are new homeowners benefiting from this extended tax credit but current homeowners can also benefit because the new legislation has included a $6500 incentive to purchase more property.
To Get the New Homebuyer’s Tax Credit of $8,000 you must not have owned a home during the last 3 years. This means that if you owned a home more than 3 years ago and then sold it, you are now eligible to get a credit of up to 10% of the purchase price or a maximum of $8,000 towards your new home. You must still come up with the initial down payment.
Many people do not have the savings or simply do not want to let go of those saved funds. Seek the advice of a real estate agent because there are many state and city grants to help get you into a home. Many of the grants will assist you with a percentage of the down payment and closing costs. Not sure why but many people just simply ignore these availability of funds and the money sits there. This is the perfect time to look into homeowner grants and utilize all the state and federal incentives to get you into a home.
While this is great news for new homebuyers, current homeowners are able to enjoy up to $6500 purchasing another home. And the new legislation doesn’t mention anything about requirements to sell your current home, so you could very well rent it out or use it as a second house.
To get the $6500 homeowner tax credit you must currently own a home that you have lived in as your primary residence for the last 5 out of 8 years. And the maximum sales price for a new home is $800,000.
There have been some changes from this year’s initial new homebuyer tax credit; because of the high incidence of fraudulent activities the IRS will not allow the tax credit to be given back at closing. Many people were using dependants under 18 years of age to file for the tax credit and some kids as young as 4 yrs old were found to own a home. Each transaction is now being scrutinized by the IRS and a check will be sent to you.
There are income restrictions so call on your real estate representative to advise you on how best to benefit from the extended tax credit.
The most important thing about the tax credit extension is that you cannot wait. Adhere to all important dates; you must have a contract on a home by April 30, 2010 and go to settlement by June 30, 2010 for you to qualify for any homebuyer tax credit.
Go to Page 2