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Homebuyer Tax Credit Extended Into 2010

November 23, 2009 by Josephine · Leave a Comment 

Hurray! The Obama Administration made it official earlier this month - the homebuyer tax credit has been extended through June 2010. This extension not only allows first-time homebuyers to continue their search without worrying about the original November 30, 2009 deadline, but the new legislation also expands eligibility and benefits. Details are as follows:

  • Homebuyers now have until April 30, 2010 to sign a contract and until June 30, 2010 to close on the purchase
  • Income limits have been raised - single buyers earning up to $125,000 and married couples earning up to $225,000 will qualify for the full credit
  • Tax credit expanded to include existing homeowners - homeowners who have owned and occupied a residence for five consecutive years within the last eight and who are now looking to trade up will be able to claim a $6,500 tax credit if they purchase by the deadline
  • Armed services members, as well as intelligence service and foreign service personnel, who are on active duty and out of the U.S. for 90 days during any part of 2009, get an additional year to buy their homes - through to May 1, 2011

It should be noted that homebuyers who purchase their home using the tax credit must use that home as a principal residence for a period of no fewer than three years, or must forfeit the entire credit. Military, intelligence and foreign service members do not have to repay the credit if they have to sell their home after fewer than three years occupancy due to official business. Additional details for first-time home buyers can be found in the following $8,000 First-Time Homebuyers Tax Credit post.

“The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

“This bill will shift demand from the second half of 2010 into the first half,” said Pat Newport, a real estate analyst with IHS Global Research. “As a result, home sales and prices will get a boost in the first half of 2010, with payback in the second.”

Bottom line: if you missed your opportunity the first time ’round, please be sure to seriously consider acting now. Those who are financially stable and in the market for a new or trade up home can give a little extra thanks this holiday season. Speaking of which…

Happy Thanksgiving to you and your families!

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Josephine Godinez, PA