Homebuyer Tax Credit Extended
The $8000 tax credit for first-time home buyers has been extended through the month of June. While the industry has seen a steep decline in loan applications in the past few weeks, the federal government is hoping that the recent approval to extend the tax credit will help bolster the industry.
Buyers must be in contract by April 30 in order to qualify for the credits. In some markets, the tax credit will also be available for "move-up" buyers. Technically, it applies to all markets, but you must have lived in your home for the last five years.
The $6500 tax credit is available for those who want to buy a replacement primary residence. Many homeowners in the Arizona, California, Nevada, and Florida markets may not be able to take advantage of the program since they may not have equity in their current primary residences to sell and make a profit. But if you live in New England, you may find that you are able to “move-up” and take advantage of the latest legislation.
If you are going to take advantage of the program, get a head start, because being up against a deadline will hamper your negotiations. Also, it's important to make sure that your income qualifies before signing.
For homes purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase. Watch out for the small print too.
Finally, don’t try to buy a home from a close relative, specifically from your spouse, parent, grandparent, child, or grandchild; it simply won’t work that way!
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