In what is sure to be happy news for anyone thinking of entering the real estate market, Congress has moved one step closer to extending the popular Homebuyers' Tax Credit. The tax break for first-time homebuyers is supposed to expire on Nov. 30th, but the Senate recently passed a resolution to extend the program, and a finished bill could be ready for the President to sign as early as next week.
Moreover, the bill to extend the program also includes funding to expand the program to homebuyers who already own a home. Under the new program, homebuyers who have lived in a home for over five years are eligible for up to $6,500 in tax savings.
In order to be eligible for the tax rebates, the new homebuyer must enter into contract April 30, 2010 and close escrow by June 30, 2010. Also, the homebuyer must be either a first-time homebuyer (has not owned a home in the past three years) or a repeat home buyer (has lived in their home for over five years). If these conditions are met, a first time homebuyer is eligible for up to 10% of the purchase price of the home, up to $8,000 dollars; repeat home buyers are capped at $6,500.
There are income restrictions on the program. Individuals who earn less than $125,000 or couples who jointly earn less than $225,000 are eligible for the full tax credit. Individuals who earn less than $145,000 or couples who jointly earn less than $245,000 are eligible for a reduced credit.
In order to receive your funds, you simply need to claim the credit on your income tax returns. If the credit exceeds your overall tax bill, the government will issue you a payment. Moreover, if you would like an immediate payment, you can retroactively file an amendment to your 2008 tax return, and the government will issue you a check immediately.
This is just one more reason why now is an excellent time to start looking for a home. Property values in Silicon Valley have flattened out and there are still excellent measures around to make home buying easier for buyers. If you are at all interested, please feel free to contact us; we are always here to answer any questions you may have.