Newly Extended Homebuyer Tax Credit Details

After much anticipation, the extension of the $8,000 homebuyer tax credit will be signed by the President as early as Tuesday, providing a sigh of relief to homebuyers desperately trying to close on a home in time to receive the credit, and a new wave of excitement for homebuyers who thought the ship had sailed.

The new homebuyer tax credit will be applied as $8,000 for first time homebuyers closing on a home before April 30th, 2010. Additionally, if you are under contract on something by April 30th, 2010, then you would have until June 30th, 2010 to get the home closed and still get the credit. The $8,000 is literally like cash in hand on your next tax return.

The bill also implements a “move-up buyer” portion. If you are buying your second home, and have owned your first home for 5 out of 8 of the past years, you would be eligible for a $6,500 credit. That’s exciting! We were hoping something like this would be added in to the extension. The same deadlines exist as for the first time homebuyers, and in each scenario the home must be a primary residence (not investment).

The income limitation to qualify increased to $225K for couples, and $125K for single people. You must provide documentation of your purchase when you file your tax returns – this new provision is to prevent tax credit fraud.

While the White House remains weary of the cost to extend the tax credit, I think it will do wonders for the housing market. I’m thrilled that it’s been extended, and even more excited that it’s been opened up to move-up buyers as well. Now for all of you buyers on the fence…jump off! You will never again see the opportunities that the market presents right now. Low interest rates, low prices, motivated sellers, masses of homes available, and now an extension of the tax credit…what are you waiting for??? Get house hunting today!
 

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