According to recent reports from The Wall Street Journal, Congress has approved an extension to the $8,000 tax credit given to first-time home buyers. The extension, which originally caused Americans to race toward a closing date of November 30, now gives Cape Coral home buyers until June 30 of 2010 to close. Contracts must be entered into by April 30th, so keep that date in mind when searching for a home during this holiday season.
Additional perks to the bill includes the creation of a new $6,500 credit for existing property owners who sell their existing home and purchase another during the same period of time. Both of these credits do include certain income restrictions which put limits on their availability.
Let's take a look at each credit separately to gain a full understanding:
The $8,000 First-Time Home Buyer Tax Credit
Eligible purchasers are limited to first-time home buyers only. A first-time home buyer is defined by the IRS as an individual or couple who has not owned a principal residence during the 3 year period prior to the current purchase.
The tax credit does not have to be repaid.
The home-buyer credit is a maximum of $8,000. The credit is equal to 10 percent of the home's purchase price. If you purchased your home for $80,000 or above, you are eligible for the maximum credit.
The tax credit only applies to homes purchased for $800,000 or less.
Income limits: For homes purchased before November 6, 2009, the income limits are $75,000 for those filing single and a combined income of $150,000 for couples filing jointly.
Income limits for the extension: For homes purchased during the extension period, which runs from November 7, 2009 until April 30, 2010, single taxpayer's income allowance has been increased to $125,000, and couples filing jointly can now earn up to $225,000.
The $6,500 Tax Credit for Repeat Home Buyers
Eligibility for the new $6,500 credit include the following stipulations:
Home buyers must have owned and lived in their previous home for five consecutive years.
This tax credit is also equal to 10 percent of the home's purchase price, with $6,500 being the maximum amount. If you purchase your home for more than $65,000, you will qualify for the maximum amount. The home purchased must be $800,000 or less.
This new credit includes homes purchased between November 7, 2009 and April 30, 2010.
Income limits: Single tax payers are allowed an income of up to $125,000 and married couples must have a combined income of $225,000 or less to qualify.
Continue to stay informed of future home buyer information by bookmarking our website. For a list of available Lee County properties, check our up-to-date MLS listings or feel free to give us a call at 239-410-5821 (Mary) or 239-691-0157 (David). You can also fill out the form on our home page to let us know how we can help with your real estate needs. We will promptly respond.
By David Sporleder | Sporleder-Ray Realty Group | firstname.lastname@example.org| Google+