First-time and Existing homeowners TAX CREDITS

The Senate approved a measure on Wednesday to extend the current first-time homebuyers tax credit to 2010.  The bill also included expanding the credit to some existing homebuyers...
The House approved the bill the following date and the president is to sign the bill today into law.

If you were in no rush to buy your first home, or sell your existing one to expand or downsize, pay attention this tax credit.

First-time Homebuyers credit is $8,000 on purchases under contract by contract by April 30, 2010 as long as the contract closes by June 2010.  It applies to first homes only and not to second or vacation homes.

Certain existing homebuyers qualify for a tax credit up to $6,500 if buying a new home.  These homebuyers have to have owned and lived in their current main homes for five consecutives years out of the past eight. 

Income limitations are also expanded under this bill to individuals earning up to $125,000 or couples with income of $250,000, which increased from $75,000 and $150,000.

The credit will apply to all contracts for homes up to $800,000 by April 30, 2010 and closed on by June 30, 2010.  Uncle Sam also is requiring homebuyers claiming this credit to attach the purchase documents to their tax returns.

These credits coupled with a significant inventory and low mortgage rates, should motivate buyers to go out and find their new homes.  It will also boost home prices over the next few months as well.

If you are already in a deal at the moment, like one of my friends, pause and make sure that you meet the above requirements and good luck.....