Thursday, January 7, 2010


Tax Credit, Condos and More – The News Keeps Coming


On the heels of Congress moving the tax credit, there is word that FHA is going to back off some of the requirements of their new condo rules which are now delayed until early December. Congress will also take up a provision to retire the HVCC shortly as well.

Meanwhile, the Fed released their statement after meeting for two days….conditions are “likely to warrant exceptionally low levels of the federal funds rate for an extended period.” Translation: short-term rates are not going up anytime soon. And that was not the end of the good news as Congress passed not only an extension, but an expansion of the tax credit. From CNN/Money:

The legislation also would extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The credit was set to expire after Nov. 30th. The legislation also created a $6,500 credit for those who buy a home after owning one for the last five years. That measure would apply to contracts signed by April 30th and closed by June 30th. The bill would raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers.

On Friday, November 6th, 2009 President Obama signed into law an extension and expansion of the home buyer tax credit. The new Tax Credit Extension goes into effect November 7th, 2009.

Which Properties are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes and co-ops.
How Much is Available?
The maximum allowable credit for first-time home buyers is $8,000 and the maximum for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by tow additional factors:

1. The price of the home.

2. The buyer’s income.

Is there a purchase price limit?

Yes, under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchase for $800,000 or less.
Is there an income limit?

Yes. Single buyers have an annual income limit of $125,000 and married buyer’s have an annual joint income limit of $225,000.

Will the tax credit have to be repaid?

No. As long as the buyer occupies the home for three or more years, the buyer does not need to repay the tax credit. However, if the home is sold prior to the 3 years, the tax credit will need to be paid back in full at the time of sale.

What are the effective dates?

The eligibility period for the tax credit is for homes purchased after Nov. 6th, 2009, and before May 1st, 2010. However, home purchases subject to a binding sales contract signed by April 30th, 2010, will qualify for the tax credit provided closing occurs prior to July 1st, 2010.

The bottom line is, with the increase in cheaper homes available due to dropping prices in the market, interest rates as low as the 4’s, the expanded homebuyer tax credit makes this the best time to buy in years!!!!! And if you're looking to buy in the greater Pierce County, Washington region , look to http://www.piercecountyhouses.com/ and Tom Tuttle specializing in Pierce County Real Estate including specific regions of Tacoma real estate, Gig Harbor real estate, University Place real estate, Puyallup real estate and South Puget Sound real estate.

http://www.irs.gov/

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