The Latest News About Home Buyer Tax Credit Legislation

There’s great news for consumers looking into purchasing a home! Congress has recently voted for further legislation, as a portion of the strategy for stimulating the U.S. real estate market, that makes the Federal tax credit of up to $8,000 now available to many more first-time buyers. In addition, certain individuals who now own a home and would like to buy a new one may also be able to obtain a Federal tax credit totaling up to $6,500.

The Extended Home Buyer Tax Credit extends and enhances the existing law which expires on November 30. Both first-time and move-up buyers may now take advantage of the new tax credit. Needless to say, this is over and above the current historically low home loan interest rates.

Here are the important new particulars:

* The first-time buyers’ $8,000 has been extended through April 30th, 2010. * Individuals who currently own a home are now eligible for a $6,500 tax credit, if they have resided in the house they are selling as their primary residence for a minimum of five straight years within the last eight years. * The income limits for qualifying buyers were increased to a range of $75,000 to $125,000 (for single buyers) and a range of $150,000 to $225,000 for couples. * Time has been added to make allowance for closing the home purchase transaction. As long as they have a legal contract by the end of April, they will then have until June 30, 2010, to finalize the purchase. * In order to qualify, the purchase price of the home has to be no more than $800,000.

Additional details:

* Tax credits grant a dollar-for-dollar payment of taxes owed with any surplus funds available as a refund. The amount of the credit will be first applied to any tax liability for the year of purchase. Then the remainder will be refunded to the buyer. (For example a first-time buyer who owes $2000 in taxes would receive a check for $6,000). * Any single-family residence purchased to be used as a primary residence (including condos, co-ops) will qualify assuming that it is purchased by the 30th of April, 2010 and closes by June 30th, 2010. * The full amount of the credit may be claimed by individuals with an adjusted gross income of no more than $125,000 or $225,000 on a joint return. Above those incomes, the amount of the tax credit drops until the upper limit is reached – $145,000 for individuals or $245,000 of joint income.

Jim Navary has been a freelance writer and researcher for more thirty years covering a broad range of subjects. He is also a licensed real estate salesperson in the Commonwealth of Virginia specializing in real estate in the Tri-Cities area of Virginia and, in particular, Tri-Cities Area, Virginia, area properties for sale.