If you haven’t already heard, it’s official; on 11/6/09 the President signed the tax credit bill that extends the current $8,000 first time home buyer tax credit (which was set to expire Nov. 30) through April 30, 2010. The bill also includes a new, ‘move up buyers’ $6,500 tax credit for homebuyers who have previously owned a home, if that home was their primary residence for five consecutive years out of the last eight years.
Both the $8,000 credit and the $6,500 credit have expanded buyer income limits ($125,000 for individuals and $225,000 for couples), and the cost of the home being purchased is limited to $800,000.
Existing home buyers will qualify for the full credit as long as they have entered a binding contract by April 30, 2010 and they close the transaction within 60 days. The tax credit is limited to homes with a purchase price of $800,000 and below. The bill also includes anti-fraud language that gives the IRS the authority to provide greater oversight during processing of the return.
As soon as the guideline specifics are announced for the “move-up buyers” I will post that as well. Rumor has it that it doesn’t technically have to be a move-up property; a lateral move may qualify as well so maybe you want to get in to a single story and out of dealing with stairs. Not sure what “lateral” means to the government though so we’ll have to wait and find out.
Additionally, the legislation waives the recapture provision for members of the armed forces who are called on extended duty. Members of the military and uniformed services, who are out of the country for at least 90 days, will also be eligible to use the tax credit upon their return through April 30, 2011.
This is huge if you’ve been thinking about making a move up in this buyer friendly market. Call me for a market analysis of your existing home if you want to determine if you should be taking advantage of this opportunity. The inventory of homes for sale by ‘real sellers’ (not a short sale or bank owned property) is very low, especially in the $250-400k range, and buyers are out there looking for clean, maintained properties. Inventory is a bit more plentiful above $400k so could be this government incentive hits your personal sweet spot.
Pass this along to friends & family who might find it useful no matter where they live as this is a national program. We’ve heard plenty about the first time home buyers credit but the fact existing home owners are getting a break for making a move up is a new twist.