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The first-time homebuyer tax credit program, that expires on November 30th, has been extended and expanded in scope to cover home purchases through April 30, 2010. The extension passed
by both houses of Congress is on its way to President Obama for his signature.
Realtors have reported that the first-time hom buyer tax credit has had the same positive effect this past Summer and Fall on home
sales that the "cash for clunkers" program had for automobile sales.
The legislation expanded eligibility for the tax credit to include people with higher incomes and those who have already owned a home for at least five of the prior eight years so long as they sign a purchase contract by April 30, 2010 and close on the purchase by June 30, 2010.
The $8,000 maximum first-time buyer credit will continue and will now be available to individuals with incomes up to $125,000 and couples with annual incomes up to $225,000 for the full credit. Home buyers with incomes up to $145,000 and couples
with incomes up to $245,000 are eligible, but for reduced credits.
Under similar income limits, a $6,500 maximum credit will be available to those who already own a home and presumably wish to move up to a larger home.
Under the new income limits about 2/3 of all American homeowners may now be eligible to buy a new home. While buyers won't be required to
sell their current home, the tax credit must be used
to buy a new "primary residence", not a vacation home or an investment property. To keep speculators out of the program, people who claim
the credit but then sell the home or no longer use it as their primary residence within three years will be required to repay the credit.
The intent is to exclude from the program speculators who might purchase a home intending to flip it for a fast profit, according to Max Baucus, chairman of the Senate Finance Committee.
The existing first-time buyer tax credit fired-up the housing market according to the National Association Realtors, but here's a "heads-up"
to those who considered buying a home under the prior program but didn't get around to it.
"Contact a competent Realtor and get started now. You only have until April 30, 2010."
Legislators have indicated that this costly program will not be extended again. Critics point out that only about a quarter of the homes purchased (350,000 out of 1.4 million homes sold) under the prior
program would not have been bought anyway without the costly tax-credit program. There are also concerns that the previous tax credit program encompassed high numbers of fraudulent transactions. The Internal Revenue Service
has been given much wider authority to oversee the process and root out fraud and abuse.
So, if you been considering buying a "first" or a "move-up" home in a different Sarasota Neighborhood, now is the time to contact a competent Realtor like Andree Huffine and get started.
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