Tax Credit Extension Update
Posted November 6, 2009
Welcome back to the written page! We’ve been offering our weekly data for Today in Real Estate in video format over the past couple of months – but since we’ve already shot the video for this week and we have breaking news – I thought I would go old school for you again.
It looks as though the Tax Credit for Housing has been extended into 2010. As of writing time – 7am Friday morning – The President had not yet signed the extension into law. It has passed both the house and the senate so his signature seems to be a formality at this point. Let me give you the details on the extension – if you noticed I did not title it the first time home buyer extension – and that was intentional in that one of the big changes to the tax credit is that additional homeowners are now eligible for the credit as well.
So here are the details…
1. The eligibility pool has changed – first time home buyers (those who have not owned a primary residence in the past three years) are still eligible up to a maximum of $8000 for the tax credit. In addition, current homeowners are also eligible – up to $6500 – as long as they have owned their current homes for at least five years. The credit is for primary residences only – second homes are not eligible.
2. The tax credit expiration dates are as follows – contracts for new home purchases must be signed by May 1, 2010 – with the closing of that transaction to be completed no later than July 1, 2010.
3. Income limits have changed for eligibility –the new limit for single filers is $125,000 – that’s up from $75,000. For married or joint filers, the new cap is $225,000 – that’s up from the previous figure of $150,000
4. There is also a value cap for eligible homes – the tax credit only applies to homes valued at or below $800,000.
So once The President makes these changes official, we hope that this potential housing catalyst helps both housing and the economy return to normal as soon as possible. Estimates from the National Association of Realtors show that up to 350,000 additional homes were sold this year due to the existing tax credit – let’s hope for much larger figures in 2010. Let’s also hope for a much better jobs picture in the year to come.
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Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.