Homebuyer Tax Credit Extended

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Homebuyer Tax Credit Extended

Atlanta home buyers, you may yet get that homebuyer tax credit. Late today, the Senate passed a bill to extend the $8,000 homebuyer tax credit until September 30th. It now goes to President Obama, who is expected to sign the bill. The bill was overwhelmingly approved by the House on Tuesday. The deadline had been June 30th to close on the property.

Before you get too excited, the bill doesn’t help anyone currently shopping for a home. Buyers must have signed a contract by April 30th to qualify for the tax break. At issue is when the deal must be finalized.

Repeat home buyers also have until September 30th to close on new homes and receive a tax credit of up to $6,500.

Congress has been trying to pass the extension for the last month, but it got caught up in the usual Washington politics. The extension is estimated to raise the deficit by $9 million.

An estimated 200,000 people have missed out on the tax credit because they wouldn’t have been able to close by the end of business Wednesday. Many are trying to take advantage of short sales, which are complicated deals to complete.

Contact us for all of your Atlanta real estate needs. We are local market experts and continue to find great deals for our clients.

Obama Set to Sign New Homebuyer Tax Credit Bill

If you thought you missed your chance of $8,000 from the government, think again!  Buy a home before May 1 and collect up to $6,500 from the government.  If you’re a first-time homebuyer, get up to $8,000.  That’s right…President Obama is set to sign an extension of the $8,000 first-time homebuyer tax credit and this new bill also includes a credit for current homeowners.

Already passed by the Senate, the House voted 403-12 Thursday to expand on the current $8,000 first-time homebuyer tax credit.  Included in the bill is an extension of unemployment benefits and expands a tax break for money-losing businesses.  It is expected that President Obama will sign the bill today.

Buyers who have owned their current homes at least five years would be eligible, subject to income limits, for tax credits of up to $6,500. First-time homebuyers — or people who haven’t owned homes in the previous three years — could get up to $8,000. To qualify, buyers have to sign purchase agreements before May 1 and close before July 1.

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes.

The credit is equal to 10 percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for others.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.

The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that were included in a bill extending unemployment benefits for those without jobs for more than a year. The other tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years.

That break would help industries that have suffered big losses in the recession, including retailers, homebuilders and newspapers.

Expanding the tax credit for money-losing companies is projected to cost $10.4 billion.

Senate Passes Extension of Homebuyer Tax Credit

Senators agreed on Wednesday to extend the popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.  The current $8,000 first-time homebuyers tax credit is set to expire at the end of November.

The agreement in the Senate extends the existing tax credit for first-time homebuyers while also offering a reduced credit of up to $6,500 tax credit to repeat buyers who have owned their current homes for at least five years.

These tax credits would be available to homebuyers who sign sales agreements by the end of April.  They would have until the end of June to close on their new homes.

September saw a 3.6 percent fall in new home sales…the first time it fell since March.  Many feel that it was the uncertainty of the tax credit that made new home sales fall in September.

It takes 45-60 days to close on a house, making it unlikely that a sale made today would qualify for the current tax credit which has a deadline of the end of November.

About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.