The Senate has voted last night (11/4) to extend and expand a popular tax credit for homebuyers that was scheduled to expire Nov. 30. The House is expected to schedule a quick vote on the bill as early as today 11/5 as part of a package that also extends unemployment benefits for people out of work more than a year. The White House indicated that the President will sign the legislation.
How the homebuyer tax credit would work:
- Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers who purchase between December 1, 2009 and May 1, 2010. First-time homebuyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.
- Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.
- Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.
- Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.
- How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.
- New anti-fraud limitations imposed.
- Cost: $10.8 billion.
Source: Bloomberg Press and Associated Press and confirmed information with the content of the Senate bill
Now may be the best time to take advantage and buy that property you have been waiting for. If you want a local full time Realtor on your side who is up to date on the market as well as the tax credit contact us here or call 612-282-7653.
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