The tax credit for U.S. homebuyers has been extended, and a new group of buyers has been made eligible.
The credit of up to $8,000 for first-time buyers, originally due to expire Nov. 30, has been extended into 2010. This is money that never has to be repaid, provided you live in the home for three years.
Homebuyers who owned and lived in their principal residence for five consecutive years of the last eight are eligible for a credit of up to $6,500.
Facts about the Homebuyer Tax Credit:
You must have a signed purchase agreement for your home no later than April 30, 2010, and the transaction must close before July 1.
First-time buyers receive a credit of 10 percent of the purchase price, up to $8,000. You are considered a first-time buyer if neither you nor your spouse has owned a principal residence in the U.S. within the last three years.
Buyers who owned and lived in their principal residence for at least five consecutive years of the last eight can receive credit of up to $6,500 when they contract to purchase a home before April 30, 2010, and close before July 1.
The upper income limit to receive the full credit is raised to $125,000 for individuals and $225,000 for couples.
If the purchase price is more than $800,000, the buyer is not eligible for the credit.
There is no minimum income for claiming the credit. You qualify for the full credit even if you won’t owe any taxes for 2009 or 2010.
You can claim the credit when you file your 2009 or 2010 tax return. And you can even apply the credit to your down payment for the purchase of an FHA-insured home.
Monday, January 25, 2010
Existing Home Sales Drop
During the month of December, existing home sales dropped more than expected.
According to the National Association of Realtors, existing homes sales dropped 16.7 percent to a seasonally adjusted annual rate of 5.45 million units.
Experts had expected December sales to reach 5.9 million annual units.
"We'll see a pickup in existing home sales in the next couple of months" as people take advantage of the tax-credit extension, said Adam York, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who forecast a 5.4 million sales pace. Although "we're past the bottom," he said, "I don't think there's going to be a lot of buyers out there looking for a home outside of the tax-induced effects until they feel more comfortable with the labor market."
During 2009, there were 5,156,000 existing home sales, which was 4.9 percent higher than 2008's total.
During November, home buyers rushed to purchase homes to qualify for the first time home buyer tax credit, which helped existing home sales gain 7.4 percent.
Experts believe the tax credit will help boost the housing market as did the Cash for Clunkers helped auto sales.
"Since Cash for Clunkers has been over, autos have seen stronger and more sustainable sales -- and that's a function of a better economy," Thomas said. "That means home sales are likely to follow."
According to the National Association of Realtors, existing homes sales dropped 16.7 percent to a seasonally adjusted annual rate of 5.45 million units.
Experts had expected December sales to reach 5.9 million annual units.
"We'll see a pickup in existing home sales in the next couple of months" as people take advantage of the tax-credit extension, said Adam York, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who forecast a 5.4 million sales pace. Although "we're past the bottom," he said, "I don't think there's going to be a lot of buyers out there looking for a home outside of the tax-induced effects until they feel more comfortable with the labor market."
During 2009, there were 5,156,000 existing home sales, which was 4.9 percent higher than 2008's total.
During November, home buyers rushed to purchase homes to qualify for the first time home buyer tax credit, which helped existing home sales gain 7.4 percent.
Experts believe the tax credit will help boost the housing market as did the Cash for Clunkers helped auto sales.
"Since Cash for Clunkers has been over, autos have seen stronger and more sustainable sales -- and that's a function of a better economy," Thomas said. "That means home sales are likely to follow."
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