As you have probably heard by now, the tax credit has been officially approved!  The President signed a bill this morning that extends the $8,000 tax credit for first time homebuyers as well as opens up an opportunity for current homeowners to get their hands on up to $6,500.  Here’s the highlights:

 

First-Time Homebuyers (FTHBs): First-time homebuyers (a person who has not owned a home for the last 3 years) may be eligible for the tax credit. The credit for FTHB’s is 10% of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five years during the last eight years.  Again, single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount.  The previous tax credit limited this income to $75,000.  Those who earn more than this cap can receive a partial credit.  Joint filers who earn up to  $225,000 are eligible for the total credit amount. Previously the income limit for married couples was $150,000.  Those who earn more than this cap can receive a partial credit.

Qualifying buyers may purchase a property with a maximum sale price of $800,000.  The previous tax credit had no limit on the purchase price of a home.

If you have any questions about the tax credit or any other pieces of this legislation, please don’t hesitate to call or e-mail me.  As always, my team will be available this weekend for any pre-approvals you might need.  On a side note, Jeremy and I attended “The Future of Short Sales and the Arizona Economy” presentation this morning at the Phoenix Association of Realtors.  There was a ton of great information so I will be putting our notes together to send your way in the next few days.