Broker's Blog - Tax Credit Update
Surprisingly enough, the real estate market in SW Wisoconsin was all in all pretty good in 2009. Sales to first time homebuyers were really kick-started by the $8000 tax credit and it helped to clean out a lot of excess inventory of lower to mid-priced homes that appeal to the first-time buyer.
The extension of this tax credit through April of 2010 and the addition of the $6500 credit for existing home owners purchasing a different residence should help this trend to continue well into the New Year.
Here are the details of the tax credit eligibility as provided by one of the mortgage companies we work with:
First-time Homebuyers
credit until April 30, 2010. In addition, those who have
signed a contract before May 1, 2010 will have 60 days
to close on the home.
· Increases the income limits to $125,000 on a single
return and $225,000 on a joint return (from $75,000
and $150,000, respectively). As with the current
credit, the extended credit has a $20,000 phase-out
after those limits are reached.
· Those who purchase in 2010 will be able to claim
credit on 2009 tax return.
· Definition of first-time buyer remains the same as
those who have not owned a home in the last three
years.
· The credit will remain at $8,000.
Other provisions regarding the homebuyer tax credit in the bill.
· No homes over $800,000 will be eligible for the tax credit.
· It will extend the tax credit for the military and other Foreign Service Officers serving abroad through
April 30, 2011. It also waives the recapture fee for all military personnel should the individual move and sells the
home within 3 years.
· Cuts down on tax credit fraud by providing authority to the IRS to do greater electronic oversight and requires that
the taxpayer claiming the credit be 18 or older.
Step-up Buyers
· Those who have owned the same home for 5
consecutive of the last 8 years will be eligible for a
$6,500 tax credit.
· The $6,500 tax credit will be eligible for purchases
between November 7,2009 and May 1, 2010. The
same opportunity to close within 60 days applies.
· The income limits are also $125,000 on a single return
and $225,000 on a joint return and have a $20,000
phase-out thereafter.
· Those who purchase in 2010 will be able to claim the
credit on 2009 tax return.
Information Provided By:
Ace Lending. LLC
Kevin Kirsch, Mortgage Consultant
Office 563-556-5847 ~ Cell 608-778-1391 ~ kevink@acelendingllc.com
4029 Pennsylvania Ave., Dubuque, IA 52002
(5) Equal Housing lender. Information is subject to change without notice. This is not an offer for extension of credit or a commitment to lend. Coosult a professional Tax Advisor for complete details.
