In a little over 3 weeks the cut off for executing a contract for the tax credits will arrive. April 30th, 2010 at midnight marks the deadline that buyer's must finish initial price and terms negotiations and execute a contract. They then will have until June 30th 2010 to close on the property. There are two tax credits currently available:
- First-Time Home Buyer Tax Credit: Value of credit is $8,000 and does NOT have to be paid back. That is under the condition that the buyer must live in the home for 3 years or the full $8,000 must be repaid. To qualify as a "first-time home buyer" you must have not owned a home in the past 3 years. So, the term "first-time" is not literal.
- Repeat Home Buyer Tax Credit: Value of credit $6,500 and does NOT have to be paid back. That is also under the condition that the buyer must live in the home for 3 years or the full $6,500 must be repaid. You must have lived in your current home for 5 consecutive years anytime during the past 8 years. A common question is, "Does the new home have to be priced higher the your old one?" The answer is no. You also do NOT have to sell your old home before April 30th or June 30th, so don't panic. However, if you cannot qualify for two mortgages, you may not have a choice but to wait for your current home to sell.
In both cases to be eligible, the yearly income must not exceed $125,000/year for singles and $225,000 for married filing jointly. I have been asked many times if I think this will be extended for a second time. I do NOT believe this will be extended again. Last November, we found out about 3 weeks before the deadline that it would be extended and there was a great deal of chatter going on about the extension weeks prior to that. This time I haven't heard anything that would signal another extension. If you are planning to take advantage of this tremendous incentive contact me with any questions you may have. I'm always here to help.