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There is wonderful news for people thinking about purchasing a home! Congress has recently voted for new legislation, as a part of the strategy for energizing the U.S. housing market, that makes the Federal tax credit of up to $8,000 now available to still more first-time home buyers. Additionally, selected individuals who currently own a home and would like to buy a new one will 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 program that expires on November 30th. Both first-time and move-up buyers may now get the benefits of the Federal tax credit. Of course, this is over and above the current historically low mortgage interest rates.

Here are the important new particulars:

* The first-time buyers’ $8,000 has been extended through the 30th of April, 2010. * Individuals who currently own a home are now eligible for a $6,500 tax credit, if they have lived in the house they are selling as their principal residence for at least five straight years out of the last eight years. * Income limits for qualifying home 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 extended to allow for closing the home purchase transaction. If they have a ratified contract by April 30, they will subsequently have until the last day of June, 2010, to finalize the purchase. The qualifying purchase price of the new residence has to be no more than $800,000.

The program works as follows:

* Tax credits provide a dollar-for-dollar payment of taxes owed and are available as a refund. The amount of the tax credit will be first credited toward any tax liability for the purchase year. After that the amount remaining will be refunded to the buyer. (For example a first-time buyer who owes $2000 in taxes would receive a payment of $6,000). * Any single-family residence purchased to be used as a principal residence (including condos, co-ops) will qualify if it is purchased by April 30, 2010 and closes by June 30, 2010. * The full amount of the is available for individuals who have an adjusted gross income of no more than $125,000 or $225,000 on a joint return. When income is greater than these figures, the amount of the tax credit decreases until the upper limit is reached – $145,000 for an individual or $245,000 of joint income.

Jim Navary has been a freelance writer and researcher for over thirty years covering a broad range of topics. 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, Colonial Heights, Virginia, area homes for sale.

Comments (1) Nov 18 2009