First-Time Homebuyer Tax Credit Extended AND Expanded into 2010
In a poll I took a few weeks back, 30% of you said you would take advantage of the first-time home buyer tax credit if it were extended. Well, it looks like you might get your chance – but, you’re not the only ones. Before we get into the details of the homebuyer tax credit extension AND expansion, let’s review how you voted.
This means that if 100% of you stuck to your word that you would take advantage of the credit, then a whopping 58% of voters will have qualified. Outstanding! On to the news.
First Time Home Buyer Tax Credit Extension Details
If the Democrats version of the Senate bill is passed when it comes to vote in the next few weeks (as it is expected to), the first-time home buyer credit extension would have the following details:
- The credit would be available for homes that go under contract by April 30, 2010. However, you would still have 60 days afterward to close.
- It would be attached to a bill to extend unemployment benefits that is expected to be voted on in the next few weeks.
- First-time buyers (those who have not owned a home for three years) can claim an $8,000 credit, the same as before the extension.
- Income limits would be expanded: $125,000 a year for individuals (up from $75,000) and $225,000 (up from $150,000) a year for married couples who are filing a joint return.
- The proposal will include anti-fraud measures, including minimum age requirements and additional authorities for the IRS.
First Time Home Buyer Tax Credit Expanded to Existing Home Owners
Perhaps the most interesting addition to the bill is that existing homeowners who buy a new principal residence after living in their current home for at least the last five years can claim up to a $6,500 tax credit. Although I don’t know that I agree with the 5 year mandate (I think that’s a bit high), at least some of us who already own homes can now get in on the tax credit. Before you go out and close on a house, make sure that the bill actually passes!
First Time HomeBuyer Credit Discussion:
- If the tax credit extension passes, would you take advantage?
- Does this motivate you to want to buy your first home?
- If you’ve owned a home for 5 years, does the tax credit expansion motivate you to move?
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The real dilemma I am in is it worth rushing buying a home for the $8k or doing it on the original schedule that I set out for early 2011?
Also, this doesn’t get applied to the down payment, it’s just a deduction on the overall mortgage, correct?
You will in effect get an $8,000 check a few months later when you file an amended tax return. At the very latest you will get it next April.
I think this is dumb. Again its adding in a whole bunch of people that didn’t fit into the mold the first time. All to subsidize people who don’t have a job for longer. Its over a year of umemployment benefits in a lot of places. What incentive are you giving them to find a job? None! People are using their paid time off to take vacations and soul search. This is crazy.
I hope this does not pass. The last one was a waste too.
I think it is a good idea to extended both benefits, such as unemployment and $ 8000 credit for firt time home buyers. People who think other wise, they are not thinking about others, few close friends of mine lost their jobs since 2007, they still unable to find any types of jobs in this economic. Instead of criicizing the goverment for try to help others during this economic crisis, they better think God for having a job
Each and every day more and more folks are losing their homes. This tax credit was needed. Without the support that it provides, who knows where the market would be.
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Yes we got the tax credit extended. But at the end of the day if we don’t do anything to keep people in their homes then this market will take years to correct. I just don’t think the gov’t has the appetite for this. But we’ll see…
I’ll be curious to see how the $6,500 step up buyer tax credit helps. With the flood of foreclosure hitting the market next year it may take more than this.
Gov’t tax credits are not enough…how about we try to keep folks in their homes rather than see them go through the foreclosure process.
very good thnks
Can anyone answer this question about the tax credit? We bought our house from my wife’s parents in May 2009. At this time the IRS didn’t specifically say you weren’t eligible for the credit if you buy a house from family. This rule was added more recently to combat fraud. If we can prove that we paid fair market value determined by two appraisals, can we still file for the credit?
Thanks for any help.
I’m still not hearing much on the $6,500 step up credit. It seems as though this one was lost in the shuffle.
Purchased 7/30/09..filed 1040X 8/3/09..received letter from IRS on 12/17 (dated 11/20) requesting a large amount of documentation including driver license with new address, utility bills, pay roll stubs, along with expected HUD, closing statement and mortgage statements. Have contacted IRS several times only to be told they have not yet logged info into system for examination. It has been faxed twice and mailed twice. Today is 1/25 and I am still no closer to getting this money after nearly 6 months than I was. The whole process is a joke and I wonder if the government just doesn’t have the $$$ to pay out!
Yah…it seems the IRS is stepping up the audits on the tax credit because of all the fraud. The problem now is that it is taking forever for the legitimate credits to be processed. That’s the IRS for you.
This will certainly keep the IRS busy. They hardly have enough time now to process the credits. Maybe we will see a decrease in other audits? Time will tell.
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