Fine Points Of Homebuyer Tax Credit Discussed
INDUSTRY NEWS, REAL ESTATE LEGISLATION, TIPS FOR BUYERS, TIPS FOR SELLERS
November 13th, 2009
An enrolled agent from Southern California once again spoke with local Realtors about the extension and expansion of the federal tax credit for homebuyers. Earl M. Salter, said this tax free credit not only applies to first-time buyers but homeowners who have owned and lived in their personal residence for 5 consecutive years during the last 8 years (Long-time Residents). First-time buyers and long-time homeowners must have a home under contract by June 1, 2010 and close escrow before August.
Additionally, the new law raises the income limits (Adjusted Gross Income or AGI) from $125,000 to $145,000 and for married couples filing jointly from $225,000 to $245,000. To qualify for the tax credit, long-time residents can buy the replacement property now and sell their current principal residence or keep it as a rental property. The credit is up to $8,000 for first-time buyers and $6,500 for married long-time residents or $3,250 for married filing separately.
Other important details include having to repay the credit if you sell within 3 years. The tax credit can be used immediately for closing costs if the loan is a government-backed loan such as FHA. Otherwise, the buyer can wait until filing their 2009 tax return for the credit. Ammending the 2008 return is another option but due to processing time, Earl said it’s better to wait and file for the credit with the 2009 return.
The bill, H.R. 3548, is called the Workers Homeownership and Business Assistance Act of 2009. More details of the bill will be released once the technical details are worked out and published by the federal government.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS REAL LIVING
CORNER OF COURT AND PLACER IN REDDING
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
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