Last week, Congress passed a bill extending the first-time home buyer tax credit from its original end date of November 30, 2009 to April 30, 2010.  First-time home buyers (defined as someone who has not owned a home during the three years prior to the current purchase) who enter into a binding sales contract between January 1, 2009 and April 30, 2010 are eligible to receive the credit providing that the sale is closed by June 30, 2010.  In addition, the income limits for buyers looking to qualify for this credit have changed.  The original limits for sales between January 1 and November 6, 2009 were $75,000 for single taxpayers and $150,000 for married taxpayers filing jointly; with the new extension, the limits have increased for sales occurring after November 6 to $125,000 for single taxpayers and $225,000 for married taxpayers filing jointly.  As before, the home purchase price must be $800,000 or less to qualify for the credit, and the tax credit will be 10% of the home’s purchase price up to $8,000.  Since this is a tax credit, it does not have to be repaid to the federal government.

The biggest change, one that will affect wider range of recent and future buyers in the San Clemente Real Estate Market, is the new tax credit for move-up and repeat home buyers.  Buyers who do not fall under the first-time home buyer definition may still qualify for a tax credit if they purchase a home after November 6, 2009 and by April 30, 2010.  The stipulations for qualifying for this credit are as follows: completing a binding sales contract to purchase a home between November 6, 2009 and April 30, 2010; completing the home purchase by June 30, 2010; showing proof that you lived in your previously purchased home 5 consecutive years out of the last 8; purchasing a new home priced at $800,000 or less; and meeting the new income requirements listed above ($125,000 for single taxpayers, $225,000 for married taxpayers filing jointly).  If you meet these qualifications, you are eligible for a tax credit equal to 10% of the purchase price up to $6,500, and like the first-time home buyer credit, these monies do not have to be repaid.

For first-time buyers still looking to purchase San Clemente real estate, you now have a longer window in which to find your perfect home and still qualify for the tax credit.  The best thing about the expansion of the tax credit to move-up and repeat buyers is that more people are now eligible to qualify for this free tax credit, not just first-time home buyers.  If you have recently entered into a sales contract or are thinking about buying that vacation condo or upgrading to a new San Clemente home, you now have an opportunity to get money back from the government for your home purchase (provided you meet the above criteria).  This is another sign that the federal government is committed to turning around the housing market, and the best part is that the benefits may be enjoyed by buyers, not the banks.  If you have been on the fence about purchasing your San Clemente Home or Condo, now is the time to start looking.

If you would like more information on the first-time or move-up/repeat buyer tax credits or have questions about the San Clemente Real Estate Market in general, please do not hesitate to contact us.

This entry was posted on Thursday, November 12th, 2009 at 3:31 pm and is filed under Buyer & Seller Tips, Market News & Analysis, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.