It’s Official! The tax credit & more…

It’s official!

Our voices in the real estate industry have been heard and we have reason to celebrate! On Wednesday this week, the Senate unanimously voted 98-0 to extend the first time home buyer tax credit. It passed overwhelmingly in the House on Thursday 403-12 and the President signed it into law yesterday (Friday).

Not only was the $8,000 first time home buyer tax credit extended, we also have a NEW $6,500 tax credit for homeowner who have been in their homes for a consecutive 5 of the last 8 years.

It is exciting enough that we were able to extend the credit for first time buyers. But, honestly it is almost more exciting that we were able to credit a new credit for existing homeowners. The idea behind the $6,500 credit is to try and stimulate the move-up market. This “middle” market has been stalled dramatically and I’m hoping this will be that extra push to help get it moving again.

Both of our tax credits will be available through June 30, 2010, but you’ll need to plan ahead. In order to qualify for the new tax credits, both buyers will need to be under contract no later than April 30, 2010 and have the sale closed no later than June 30, 2010. Sounds simple enough, right? If you’re a first time buyer who is considering any sort of financing, you’ll need to give yourself more than enough time. Finding that right home is the first step, but our financing is taking longer than it used to and in some cases it might be 45 or 60 or 90 days just waiting for the bank’s approval!

We also have wonderful news as the income limits were increased. This new bill increases the cap from $125,000 to $225,000 and the bill is good for any home purchased that is $800,000 or less. These increases are ideal, as they should help move that “middle” market that has been hurting for a while.

To help even more, this particular bill also provides an additional 20 weeks unemployment benefits. Our construction and manufacturing industry has been hit so hard in this state, I’m thankful that our jobless might see a little bit of help.

As one last benefit, out struggling businesses who had losses for 2008 and 2009 may be able to seek refunds on taxes they paid on profits over the last 5 years.

So, are we out of the woods? No, but we’re getting a little closer.

However, not only was the original first time home buyer tax credit extended, we got some additional perks in this bill for buyers! Here’s some of the details:

Jan 1 – Nov 30, 2009 (rules enacted Feb 2009)

First Time Buyer:

Amount of Credit $8,000 ($4,000 married, filing separate)

Definition: May not have had an interest in a principal residence for last 3 years

Current Homeowner:

No provision

Applies to ALL 2009 above:

Termination of Credit: Close sale by November 30, 2009.. but, see 2010 extension below

Income Limits: $75,000 if single and $150,000 if married; Additional $20,000 phase out

Limitation on cost of home: None

Purchase by dependent: No provision

Anti-fraud Rule: None

Dec 1 – Apr 30, 2010 (rules enacted Nov 2009)

First Time Buyer:

Amount of Credit $8,000 ($4,000 married, filing separate)

Definition: May not have had an interest in a principal residence for last 3 years

Current Homeowner:

Amount of Credit: $6,500 ($3,250 married, filing separate)

Definition: Must have used home sold or being sold as principal residence for 5 of the previous 8 years

Applies to ALL 2010 above:

Termination of Credit: Must be under contract by April 30, 2010 and close by June 30, 2010

Income Limits: Increased to $125,000 if single and $225,000 if married; Additional $20,000 phase out

Limitation on cost of home: $800,000

Purchase by dependent: Ineligible

Anti-fraud Rule: Must attach documentation to tax return

Thinking about buying? Now’s the time! Give me a call at (206) 293-1005 or send an email to jen@jenhudsonhomes.com.