Congress has extended and expanded the homebuyer tax credit. The modifications will become effective when President Obama signs the bill, which could occur as early as November 6, 2009.
I have received numerous emails and comments from readers who asked for me to report the changes to the First Time Homebuyers Tax Credit when they occurred, and the changes most likely will occur immediately. This post will review the changes and enhancements so you should be able to understand the new housing tax credit. I
The Obama Administration Says Buy A Home
Buy a house and you can take part in the Obama Stimulus plan. The Obama train is printing wheelbarrow loads of money for everybody who wants to buy a home now, not just first timers! So, how does this all work?
The $8,000 homebuyer tax credit for first-time buyers, due to expire November 30, 2009, will be extended through June 30, 2010. First-time buyers who are in the process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, roughly a $55,000 increase above the level in existing law.
For the first time, the new legislation states that buyers who already own a home are eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.
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Download Home Buyer Tax Credit Changes Flyer
In order to provide a means to simplify and identify the new additions and changes to the program, we have prepared a one-page flyer that explains the features of both the old and the new programs, and provides the guidance and limitations for each.
This flyer will be updated should any of the programs change in the future, so please check back here from time to time to make sure you do not miss any of the updates.
The flyer will also be available for download in the right sidebar of the Tallahassee Real Estate Blog, under the section titled “First Time Home Buyers“.
Remember, we love your feedback, so please comment below and let us know what you think of this flyer and what you think of this new Home Buyer Tax Credit. Are you heading out to get your wheelbarrow?
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Great news! It’s effective legislation.
and there are lots of ways to finance real estate purchases
The Senate voted 98-0 Wednesday to extend the February “stimulus” package tax credit for first-time homebuyers. About 1.4 million tax credits of $8,000 have been available for those buying their first home between January and August; the program was set to expire this month. The National Association of Realtors claims that 350,000 of the lucky grantees would not have bought homes without the credit. Now, $6,500 will be doled out to “qualified” buyers — even some who already own homes — between now and April 30, 2010.
Sen. Kit Bond (R-MO) questioned the credit’s efficiency, saying, “For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home. And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place.” Bond — drum roll, please — voted for the bill anyway. ‘Atta boy, Kit! Show ‘em that GOP spine.
Does the following qualify for first time buyer category?
Husband and wife buy house, wife is first time home-buyer, husband is not?
Hey Rob, great question. It would depend who “owned” the first house. If both on deed, then both owned the house.
If I buy a condo and a garage or a storage unit that’s in the same building but is not attached to the condo unit itself, would whole purchase qualify for the first time homebuyer tax credit, or just the amount for the unit itself?
Thanks,
Dan
Dan, most likely, if it is recorded under just 1 tax ID number, then it should qualify in the entirety. But if they are separate parcels, I suspect you might be pushing it to claim them both. If they are separate, just put most of the amount of your offer towards the condo, and less towards the storage. Does that make sense?