BREAKING NEWS: President Obama Signs Bill Expanding Homebuyer Tax Credit
President Barack Obama inked his approval of the bill extending and expanding the homebuyer tax credit incentive Friday morning.
The housing tax break, which was initially set to expire at the end of this month, is now available to buyers who sign a contract by April 30, 2010, and close by June 30.
The credit amount is based on 10 percent of the home’s purchase price. The maximum available to first-time buyers is $8,000. Other buyers, who’ve lived in their current residence for at least five years but want to relocate to a new primary residence can receive a credit of up to $6,500 – the incentive for these so-called “step-up” buyers will begin on December 1 of this year.
The income limits for both first-timers and step-up buyers is $125,000 for individuals and $225,000 for couples – up significantly from the current first-time buyer thresholds of $75,000 per individual and $150,000 per couple.
The tax break is only available on primary residences priced at $800,000 or less. Vacation or investment properties are not eligible. Beneficiaries who sell the home or stop using it as their primary residence within three years would be required to repay the credit.
“The rebound in the housing market was one of the big factors that contributed to the growth of the economy last quarter,” President Obama said at a national address in the White House Rose Garden Friday. “We want to give even more families the chance to own their own home.”
The expansion of the homebuyer tax benefit received widespread support from lawmakers, despite concerns over what it might cost the government in lost taxes.
The measure passed unanimously in the Senate earlier this week and cleared the House with a vote of 403 to 12.
President Obama assured the American people this morning that the homebuyer tax credit measure, which was attached to a larger bill extending unemployment benefits, would not increase the national deficit.C
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Author: Carrie Bay • Date: 11/06/2009
Here are the details…
First Time Homebuyer Credit Changes
1. The house your clients are buying has to be under contract by April 30, 2010.
2. It has to close by JULY 1, 2010.
3. 1st time home buyers still get an $8,000 tax credit.
4. Non-1st time home buyers get a $6,500 tax credit IF they have lived in their home consecutively for 5 out of the last 8 years.
5. Income limits have been raised to $125,000/yr. for a single person and $225,000/yr for couples.
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