It’s official! Obama signed an Unemployment Insurance bill today, which included provisions to extend the first-time home buyer credit of $8,000 and create a new home buyer credit of $6,500 for repeat buyers.
This will almost certainly give a boost to the real estate market, as now many current homeowners have incentive to move to a new home. Many homeowners have been hesitant to move, because they aren’t comfortable with selling in this market which has depreciated the past couple of years. But the incentive of a free $6,500 should change some minds. Especially considering the house they will be buying should also have a depreciated price, and interest rates are near all-time lows.
Here are the basics of the New Home Buyer Tax Credit:
- First-time buyer is defined as someone who has not owned a home for the past 3 years.
- First-time buyers receive $8,000 tax credit.
- To qualify for the $6,500 tax credit, you must have owned a primary residence for at least 5 of the previous 8 years.
- You do not qualify if your income is $125,000 or more ($225,000 for married couple)
- You must have an accepted offer by April 30, 2010, and closing must be no later than June 30th, 2010.
- Both of these tax credits are such that you actually get cash from the government (unless you owe money after doing your tax returns, in which case you would owe less money thanks to the $8,000 or $6,5000 credit)
Go to Home Buyer Tax Credit Info to see an easy to understand chart, FAQ, and other information about the new homebuyer tax credit.