This morning, the $8000 tax credit extension was extended and expanded for first-time home buyers. This is the tentative plan, but not official until the government releases the documents with all of the fine print.
Here's the new tax credit deal the Senate settled on this morning:
The $8,000 first-time home buyer tax credit would be extended (it was set to expire November 30) for home buying contracts that are finalized by April 30, 2010 and close before June 30, 2010.
A new $6,500 tax credit is available to some existing homeowners who lived in a home for a consecutive 5 years out of the past 8 years.
The income limits have been raised, so both tax credits will be available to those individuals earning up to $125,000 (currently set at $75,000), or up to $225,000 (currently set at $150,000) for couples.
This extension comes as September housing numbers were released and showed slowing in the housing market because buyers would not be able to close before the November 30, 2009 previously set deadline.
Each state will receive a different set amount of money, earlier this year Utah received $8,000,000 in federal stimulus money for first time home buyer tax credit, and $10,000,000 last year.
Sources: CBS Money Watch and Atlanta Real Estate Forum
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Comments
Does anyone know? I entered into the contract in October, but am not due to close until December or January. Does this extension cover me?
Hi Mary Ann, I think this credit will work for you. Ask your realtor for more information. :)
Any idea why they aren't allowing purchases from parents to child & vice versa? I want to & it otherwise qualifies & this restriction makes no sense to me. My parents are investors with a few properties & I've lived in one for a number of years paying rent & would like to enter the ownership market. I'd be frauding how?
It matters if I decide to apply anyway & then challenge it with the IRS - I need to understand the logic behind the law. (I've challenged wording successfully on a much smaller item before.)
Thanks!
MaryAnn - if you close by June you're fine. That's the way it reads.
Hi Sharon, honestly I am not sure why they've made that restriction. The only thing that comes to mind is that the purpose of the stimulus money was to stimulate the economy and perhaps they don't see a parent/child sale as doing that? Have you spoken to a real estate agent to see if there is any way to get around it?
I'm closing on a condo on 11/25 but I don't qualify for the existing credit due to the income limits. Does anyone know if they're raising the limits for closings after 11/30? or would the income limit be raised for the whole time period?
PS...great article...thanks for the info.
Mary Ann & Marci,
The extension is not actually law yet. But if it is passed I would advise you to check IRS.gov documents or call the IRS. I found that during the previous tax credit realtors gave incorrect off the cuff advice in regards to the working of the credit. Hope this helps.
Hi AD...this is the way that I understand it (and until we see the wording in this new law we won't know for sure)...the extension takes place after Nov 30 so the income limits will be raised to $125,000 for singles or up to $225,000 for a couple. If you are single and earning more than $75,000 a year, but NOT more than $125,000...it sounds like it would be in your best interest to extend that closing date until after Nov 30. Ask your realtor about it. :)
PS...great article...thanks for the info.
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