Well it’s now official. The Worker, Homeownership, and Business Assistance Act of 2009 was signed into law today, and among other measures, extends the $8,000 first time homebuyer tax credit, but there are some things that are important to point out.
The real difference in this iteration is the fact that now the tax credit has been expanded to people who currently own homes, however that credit is $6,500, and in order to qualify, homeowners must have owned their current home for 5 consecutive years out of the last 8. According to sources, this would now make up to 70% of current homeowners eligible for the expanded program.
There are income restrictions (they’ve actually been increased) that you should be aware of that apply both to first time homebuyers as well as current homeowners. For individuals making an annual income of $125K or less, or couples making $225K or less, who have not owned a home in the last three years, you are now eligible to claim the $8,000 on your taxes provided that you have an accepted contract on a home by May 1, 2010 and have it closed by the end of June. This applies to purchases of $800K or less, and only applies to a primary residence.
People taking advantage of this program, whether a first time homebuyer or a current homeowner moving-up into a new home, would be able to claim this purchase on their 2009 taxes, even if the purchase was made in 2010 by filing an amended return.
Politics aside, this is a move that will certainly help keep a head of steam behind this market movement that we’ve been watching do some great things for the last 5 months. This also eliminates much of the anxious speculation that has been going on in this industry for the last few months and allows those folks who have had trouble finding something breathe a little easier.
Remember, if you’ve got any questions about the current state of the expanded tax credit, or if you have questions about Phoenix real estate in general, please let us know, and thanks for reading.
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