All we’ve been hearing as of late is that the $8000 tax credit for first time homebuyers ends on November 30th. Not good news for anyone who isn’t already in the late stages of a home purchase. Well, there seems to be good news on the horizon.
While a final deal was not yet reached, there are encouraging signs that a new deal is very likely. It is more a question of “when” than “if”.
The proposed deal (which is still subject to change) would extend the tax credit until April 30, 2010 and also expand it to “move up” borrowers.
Details of the revised homebuyer credit reportedly are as follows:
- Credit is changed to 10% of sales price up to $7290
- For first time homebuyers, the income level to qualify is $75,000 single/$150,000 married.
- For “move up” buyers the income level to qualify is $125,000 single/$250,000 married.
- For “move up” buyers, they must have been residing in their primary residence for 5 years.
- The credit runs from Dec. 1, 2009 to April 30, 2010.
- Sales contracts signed as of April 30, 2010 would have 60 days to close.
The cost of the tax credits are steep, some say they approach $1 billion per month, but no one can argue that they are helping to prop up the housing market with over 1.2 million people claiming the credit this year alone. Many of those homebuyers said the credit was the deciding factor to their purchase decision. The tax break, enacted earlier this year as part of the $787 billion economic stimulus package, has “brought new families into the housing market and contributed to three consecutive months of rising home prices,” Treasury Secretary Timothy Geithner said today in a statement.
We are continuously monitoring this evolving story. Should you have any questions about how the tax credits can work for you, please contact Elena ([email protected]) or Libby ([email protected]) directly.
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