| The Obama Administration has passed "The Worker, | | | | How Much: |
| Homeownership, and Business Assistance Act of | | | | Tax Credit up to $8000 |
| 2009″ to offer First Time Home Buyers a Tax | | | | How much tax you qualify for depends on your annual |
| Credit up to $8000. This tax credit was set to expire in | | | | income and when you purchased the home. |
| November of this year, but has been extended into | | | | If the home sale occurred after November 6, 2009, |
| 2010. With the high number of foreclosures and | | | | qualifying income limits are $125,000 for single |
| property listings requiring a bank approval via a short | | | | taxpayers and $225,000 for married couples filing joint |
| sale transaction, this tax credit has been a major | | | | returns. |
| factor in the increase of buyers in recent months. | | | | If the home sale occurred on or after Jan 1, 2009, |
| This is good news because it means REOs and | | | | qualifying income limits are $75,000 for single tax |
| homes that are selling via a short sale will have an | | | | payers and $150,000 for married couples filing joint |
| increasing number of buyers looking at these | | | | returns. |
| properties and the more of these properties that are | | | | Qualified Purchase Dates: |
| sold and off the market the faster the housing market | | | | Sale must occur on or after Jan 1, 2009 and on or |
| will stabilize. But who knows how long this ride will last. | | | | before Apr 30, 2010. IF there is a binding sales contract |
| The one take away from this current trend is that | | | | that is signed on Apr 30th, 2009, the tax credit will still |
| Real Estate Agents should be looking and working | | | | apply if the purchase is completed by Jun 30, 2010. |
| short sale opportunities NOW, especially because | | | | 2) Existing Buyers (Repeat or Move Up Buyers) |
| buyers are back in the market. Imagine if an agent | | | | Definition: |
| closed 1 purchase transaction a month, that would be | | | | The definition of an existing buyer is as someone who |
| 12 transactions per year. If they just focused 25% of | | | | has both owned and lived in the same residence for a |
| their time to work short sale transactions, the agent | | | | minimum of 5 and a maximum of 8 years prior to |
| could have an additional 3 transactions, totaling 15 for | | | | buying a new home. This definition is test for married |
| the year. | | | | couples in order to define who gets tax credits, if any. |
| So what does this Tax assistance really mean? Well, it | | | | The new home being purchase does not have to be |
| certainly has been a reason for the increasing number | | | | more in value to qualify for the tax credit. |
| of buyers the past month, but it also has caused a lot | | | | How Much: |
| of confusion due to the changes in qualification | | | | Tax Credit up to $6500 |
| guidelines from the previous tax credit program. So | | | | How much you get is based on ten percent of the |
| let's break it down and see what the deal is with this | | | | home purchase price and maxes out at $6500. Any |
| new extended Home Buyer Tax Credit program. | | | | home purchase $800K and over do not qualify for the |
| First of all, there are two qualifying home buyers for | | | | tax credit. |
| this tax. 1) first time home buyers purchasing as their | | | | Income qualification limits are $125,000 for single |
| primary/principal residence and 2) existing | | | | taxpayers and $225,000 for married taxpayers filing |
| homeowners who are looking to move-up/repeat | | | | joint returns. |
| buying a primary/principal residence. Now let's look at | | | | Qualified Purchase Dates: |
| the qualification guidelines for each type of home | | | | Sale must occur on or after Nov 6, 2009 and on or |
| buyer. | | | | before Apr 30, 2010. IF there is a binding sales contract |
| 1) First Time Home Buyer | | | | that is signed on Apr 30th, 2009, the tax credit will still |
| Definition: | | | | apply if the purchase is completed by Jun 30, 2010. |
| The definition of a first time home buyer is someone | | | | How the tax works |
| who has not owned a home for the 3 years prior to | | | | If you owe $8000 in income taxes and you receive |
| the home purchase. If married, this test of the definition | | | | $8000 for the First Time Home Buyer Tax Credit, you |
| will apply to both spouses. If one spouse qualifies under | | | | would owe nothing to the IRS. It is a tax credit NOT a |
| this definition and the other does not, the one that does | | | | tax deduction. |
| qualify can claim the tax. | | | | |