On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time homebuyers, scheduled to expire Nov. 30, until next spring.

A lot of people are interested in taking advantage of this tax break, but the expanded credit also has whipped up a lot of confusion. Here are some answers to frequently asked questions:

Q: How do I qualify for the $6,500 credit?

A: This credit is available for homebuyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time homebuyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn’t require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.

Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?

A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.

Q: Does the home I buy have to be more expensive than the one I own now?

A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there’s no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.

If you are planning to move up, keep in mind that you can’t claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn’t slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 – and that refers to the purchase price, not the assessed value or the amount of your mortgage – you are ineligible for the credit, period.

The $800,000 cap also applies to first-time homebuyers, but only those who purchase a home after Nov. 6. First-time homebuyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.

Q: I’m an existing homeowner, and would like to build a new home. Can I claim the credit?

A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn’t habitable by June 30, you won’t be able to claim the credit, he says.

Q: I bought a home in 2008 and claimed the old $7,500 first-time homebuyers credit, which must be repaid over 15 years. Did the new law change that rule?

A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.

The $8,000 first-time homebuyer credit, available for homes purchased after Dec. 31, 2008, doesn’t have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don’t have to repay that money, either, as long as they meet the three-year requirement.

Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time homebuyer credit?

A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between “related parties,” Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.

Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?

A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.

Copyright © 2009 USA TODAY. All rights reserved.

As you may know, on January 1, 2009, Congress enacted the first-time home buyer tax credit which offered those buying their home on or after January 1 and closing by November 30, 2009 an $8,000 tax credit. With the extension, first-time home buyers who purchase their homes by April 30, 2010 will also qualify for the credit.

Even more exciting, the tax credit is no longer just limited to first-time home buyers. Those who have lived in their current homes for five of the last eight years now qualify for a $6,500 tax credit.

The bill also increased qualifying income limits to $125,000 for individuals and $225,000 for married couples.

To put this in perspective, the credit is like getting a rebate on the purchase of your home. When you file your taxes, the $8,000 credit will be taken directly off the taxes you owe. For example, if you owe $9,000, after the credit you’ll only owe $1,000 ($2,500 for current home owners). If you only owe $1,000 in taxes, you’ll receive a refund of $7,000 ($5,500 for current home owners). If you don’t want to wait until tax time, you can even refile your past year’s taxes to get the refund sooner.

Again, this is great news for those looking to buy a new home. Add near record low interest rates, motivated new home builders, and signs of stabilization in the market and buyers have an opportunity right now that we may never see again.

Buyers should be careful not to procrastinate. Now’s the time to start shopping. You don’t want to find yourself scrambling in February or March as time runs out on the credit.

If you’re thinking about buying a home, be sure to give us a call. We can help you take advantage of the tax credit, help you find builder incentives, line up great financing and most important, find the home that’s right for you.

I wanted to provide free buyer agency services for new home buyers.  I envisioned a company where, from one central location, buyers could review all of the new homes available and learn about the various builders and communities in the Tampa Bay area.  New home buyers needed a real estate company consisting of new home experts that would eliminate confusion and represent them exclusively throughout the entire transaction.

Things are different for today’s home buyers.  Buyers have a wealth of information at their fingertips. With the Internet, they can find everything from communities in A-rated school districts to virtual tours of the homes.

And yet with all of this information, the need for an experienced real estate agent specializing in new homes remains. Yes, now a-days, most builders and communities have web sites, but sifting through site after site trying to compare builders, floor plans, neighborhoods, and the best value, can be extremely difficult and tedious.  Even with online access, nothing replaces the face-to-face expertise and discovery offered by a seasoned new homes real estate agent.  The benefits are numerous:

• Searches on individual builder or community web sites can be time consuming and unproductive.  A real estate professional will be more adept than the most sophisticated web site or search engine at making streamlined and relevant home suggestions.
• You can ask questions and get solid feedback when working with a new home specialist. The New Homes America agents provide this free service to the buyer, so if you want advice or have a question, a real person is there for you.
• New home specialists know all of the builders and communities in the area. They can help determine the buyer’s needs and zero in on the best fit locations, neighborhoods, and floor plans.
• New Homes America agents can help educate the buyer on quality builders with high customer satisfaction.
• Builder incentives and promotions are not always updated on builder web sites. New Homes America agents are updated daily with the latest and greatest builder programs.
• New home agents are experts in the new home buying experience. Whether you want to buy a new home and move in right away or you are looking to build, a new home specialist understands the process and can help educate you and empower you to make the best decision.
• New home buyers are learning the advantages of being represented. Traditionally, when a buyer visits a new home community, they will be assisted by a sales person who represents the builder. A new home specialist, representing the buyer, looks out for the buyer’s best interest.

When choosing a real estate agent to help you find a new home, make sure you choose a professional who will act as an advocate—an agent who knows the process and will be there to assist you every step of the way. Selecting the right home is only the first step. Work with an agent who will help you negotiate the best new home deal and will guide you through the process from contract to closing!

If you’re building a new home, your agent should attend the construction meetings with you and should make sure everything goes according to plan.  A new home expert knows the building process and knows what to watch for.

Most importantly, a new home buyers agent will be in your corner, knows how to work with builders and will keep everything on track.

Check back in to the New Homes America Blog for more of Tampa’s Best Real Estate Knowledge.

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