IT'S OFFICIAL!! HOME BUYER HELP SIGNED INTO LAW!!

The bill signed into law extends the tax credit of up to $8000 to first time buyers and also includes a tax credit of up to $6500 for homeowners who have been in their home for 5 years or more. CLICK ON THIS ARTICLE'S HEADING to link to a list of Frequently Asked Questions about the tax credit.

GREAT NEWS FOR FIRST HOME BUYERS

The tax credit of up to $8,000 that was set to expire on November 30, 2009 is very likely to be extended by a vote of the US Congress by the end of this week. The deadline for signing a contract to purchase is now April 30, 2010 with a deadline for closing on the purchase of June 30, 2010.

The credit is for 10% of the purchase price (up to $8,000), which can be claimed on either the 2009 or 2010 tax return—or it can be claimed by filing an amended return on the 2009 tax filing. The definition of “first time buyer” is anyone who has not owned a home in the 3 years preceding the closing of the new purchase. There are income limits, but they are quite liberal.

This really represents a perfect storm for first time home buyers: historically low home prices, historically low interest rates and a substantial tax credit. THIS IS A TRUE TAX CREDIT—A BUYER DOES NOT HAVE TO HAVE PAID ANYTHING IN INCOME TAXES TO QUALIFY FOR THE CREDIT—POTENTIALLY RESULTING IN A TAX REFUND. Handy to have for furniture, appliances, repairs and home improvements!