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There’s great news for homebuyers in the recently passed Homebuyer Tax Credit. The current first-time homebuyer tax credit of up to $8,000 has been extended to April 30, 2010. To qualify as a first-time homebuyer, the purchaser and their spouse may not have owned a home within three years prior to purchasing the house. Along with the extension of the existing program, income limits have been changed. Qualifying income limits have been raised to $125,000 for single buyers and $225,000 for couples.
A welcomed new addition to the homebuyer tax credit allows a provision for current homeowners. Current homeowners may benefit from up to a $6,500 tax credit on purchasing a home from November 7, 2009 – April 30, 2010, if the home being sold has been their principal residence for five years consecutively within the last 8 years. The inclusion of current homeowners in the bill is seen as a major step in helping to boost the economy and increase home sales.
Homebuyers do not have to repay the tax credit if they remain in the house for three years. If the homebuyer sells the home before a three-year time period, the total credit will be recouped upon the sale of the home.
The maximum price of the home may not exceed $800,000 to qualify for the tax credit. Primary residents that qualify for the Extended Home Buyer Tax Credit include single-family homes, townhouses, condos and co-ops.
“REALTORS® across the nation have been advocating an extension and expansion of the homebuyer tax credit,” says Ryan Conrad, Director of Government Affairs with the Lehigh Valley Association of REALTORS®. “Over half a million letters were sent to Congress in support of the changes. Locally, we have been extremely active in voicing our opinions,” Conrad adds.
The Lehigh Valley Association of REALTORS® recently released the October 2009 Market Update. Statistics show that home sales were up 30% over last year for the same time period. This is the fifth consecutive month that home sales have risen. “We believe that the homebuyer tax credit has had an influence on increased sales,” says Conrad. “Any people who were ‘on-the-fence’ decided that the time was right to buy because of the tax incentives. National Association of REALTORS® economists estimate that the current tax credit has contributed $22 billion to the general economy, and that approximately 2 million people will take advantage of the tax credit this year.”
Conrad reports that the legislation passed the House by a vote of 403-12 on November 5, after passing the Senate 98-0 on November 4.
President Obama signed the legislation into law on November 6. Lehigh Valley Congressman Charlie Dent (R, PA-15) voted in favor of the legislation, as did Pennsylvania U.S. Senators Arlen Specter (D) and Bob Casey (D).
“The passing of this bill will further assist with sustained real estate recovery both in the Lehigh Valley and the nation,” adds Conrad.
This article is provided courtesy of the members of the Lehigh Valley Association of REALTORS®. Visit us at www.LVRealEstateCentral.com . |