Homebuyer Tax Credit Extends into 2010
By Grace on Dec 18, 2009 in Market News
Millions of first-time homebuyers throughout the country took advantage of the new homebuyer tax credit this year, and the good news continues.
Much to the relief of homebuyers, real estate professionals and lenders, the federal government just recently announced that they will extend the first-time homebuyer tax credit throughout April 2010.
There are other changes to the tax credit that has many people perking up their ears, as well. They include:
- A 6,500 tax credit for existing homeowners who want to “move up.”
- As of December 1, income limits for the first-time homebuyer tax credit rise from $75,000 for a single individual to $125,000, and from $150,000 for a married couple to $225,000.
- A maximum cap of $800,000 for a home purchase.
- A home buyer must have a sales agreement by April 30, 2010, and close on the property by June 30, 2010.
The new homebuyer tax credit, which is part of the overall federal stimulus package, has pumped more than $22 billion into the economy. In fact, the National Association of Realtors estimates that more than two million people (more than 200,000 transactions) took advantage of the tax credit this year alone.
It is clear that this incentive helped the real estate industry in general, so it only makes sense that the program is extended. For areas of the country that are still drowning in bank-owned homes, this extension could not have been better news.
The tax credit does extend to foreclosed homes, provided that the buyer will use it as his/her primary residence. The tax credit has also helped the housing market stabilize, which therefore helps local economies, such as Dallas County and Tarrant County.
The move to extend the homebuyer tax credit was also part of the unemployment benefits extension legislation. In addition, it doesn’t hurt that mortgage rates are still dipping below the five percent range.
The tax credit may extend longer for military personnel. Military personnel who are deployed overseas may have until April 30, 2011 to claim the tax credit, provided they are deployed overseas for a minimum of 90 days throughout 2008 or 2009.
