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Extended Home Buyer’s Tax Credit Means Opportunity
On November 5th, the President signed a bill which not only extended the first-time home buyer tax credit but also expanded the credit to current home owners. This is great news for home buyers who have been looking for an incentive to buy.
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.
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