Expiration date for the credit moves from needing to close by November
30 to needing to get under contract by April 30, 2010, and close by
July 1, 2010. It is an $8,000 maximum credit for married couples,
$4,000 for individual taxpayers filing separately.
A new feature of the tax credit is that home buyers residing in the
current residence for any consecutive five-year period during the
eight-year period ending on the date of the purchase of a subsequent
principal residence are now also eligible, but for a slightly smaller
credit: married couples for $6,500, $3,200 for taxpayers filing
separately.
The income limits for both tax credits have been raised to $125,000
(increased from the former $75,000) for individual filers and $225,000
(formerly $150,000) for married joint filers. The credits are,
amazingly, fully refundable: they will be paid out to eligible
taxpayers, even if they owe no tax or the credit is more than the tax
owed. The definition of a first-time home buyer is not having had an
interest in a principal residence for three years prior to purchase.
Vacation homes are ineligible.
Added restrictions include the tax credit may not be used to buy a home
for more than $800,000, dependents (children under 18) are no longer
eligible as purchasers and, as an anti-fraud measure, all buyers
seeking the credit must include purchase documentation on their tax
returns. Properties that close after November 6, 2009, the day of
enactment, are eligible.
Rep. Jim McDermott, D-Washington:
"The home buyers' credit has helped pave the way for stabilization in
the housing market and contributed to three consecutive months of
rising home prices. Its extension will continue to make home ownership
more affordable and bring confidence to a housing market and economy
that remain fragile."
Charles McMillan, president of the National Association of Realtors:
"The substantial rise in home sales we've seen over the past few months
proves that the tax credit is working and is being used by buyers who
were waiting for the right opportunity to get into the market. This
important incentive is helping to stabilize the housing market,
stimulate the economy and create new jobs in communities all across our
great nation. Extending and expanding the home buyer tax credit will
enable even more families to take advantage of current low interest
rates and affordable prices to invest in their future through
homeownership."
The Wall Street Journal reported Sen. Johnny Isakson, the
Georgia Republican who has been a staunch advocate of the credit,
promised that this would be the "last extension" of the credit,
according to Dow Jones Newswires' Corey Boles. "Tax credits like this
only work by creating the sense of urgency to take advantage of it,"
Sen. Isakson said. For the full text of the Wall Street Journal online article on the tax credit extension go to
http://blogs.wsj.com/developments/2009/10/29/qa-the-home-buyer-tax-credit-extension/.
To visit the Internal Revenue Service website on the First Time
Homebuyer Tax Credit, go to
www.irs.gov/newsroom/article/0,,id=204671,00.html.
If you have further questions on the tax credit extension and
expansion, contact me at maplesweet.com or call 800-525-7965 or email
Cormier owns Maple Sweet Real Estate in Waitsfield.
