Homebuyers get a second shot at $8,000
If you feel like the first-time homebuyer tax credit was a sweet deal that you missed out on, you'll now
Rick Pinto, an agent with William Raveis in Danbury talks with a client about the first-time homebuyer tax credit have another shot.
Nearly 88,000 in the tri-state area had already claimed the credit through September. The program, which was set to expire on Nov. 30, has been extended through April 30, 2010, and 'has been expanded to include current homeowners. The credit for first-time buyers is $8,000. For current homeowners who buy another house it is $6,500. Eligibility will be limited to individuals with an income of $125,000 and $225,000 for married couples. There is also a limit on the price of the home you can buy — $800,000 — that wasn't the case before.
Connecticut Senator Chris Dodd slipped the measure into the Emergency Unemployment Compensation Extension Act signed into law by President Obama on Nov. 7. The legislation passed the Senate 98-0 and the House 403-12.
"Already, the homebuyer's tax credit has helped to stabilize the housing market," Dodd said. "And now thousands more middle-class families in Connecticut will be eligible to take advantage of this successful program. This extension and expansion will help our economy grow and allow many more middle-class families to realize the American Dream."
Connecticut Senator Chris Dodd Local real estate professionals say the lure of the tax credits could boost sales in what is' traditionally a slow time of year: winter. The tax credit has certainly boosted up sales. I probably would not be as busy as I'm if it wasn't for the tax credit," said Rick Pinto, an agent with William Raveis in Danbury. Pinto also said the expansion of the credit could inspire "move-up buyers" who didn't previously qualify for the tax credit, which comes as a check for homeowners to use as they please.
"I received a lot of phone calls in the past from clients that already own a home asking if they qualified for the tax credit. Now I can tell them 'yes.'" Pinto said he has worked with probably 20 clients that have benefited from the tax credit. Leila Roxo, 27, was one of them. She and her husband purchased a home this summer and used the $8,000 credit to pay for the down payment.. The young couple and their toddler could not be happier with the freedom of owning their own home.
"My 4-year-old can run, jump around the house and make all the noise he wants." Roxo said, adding "The credit helped us a lot. It was basically a gift that the government has given our family. If there is anyone out there that is thinking of buying a home the time is now".
Under the new legislation, many first-time buyers could qualify for up to $8,000 if they sign a purchase agreement to buy a home before May 1 and close on the deal before July1. It's available to buyers who haven't owned a home within the past three years, under certain price and income requirements.
The new credit for existing homeowners is a credit of up to $6,500 if they buy a new principal residence by those same deadlines. To be eligible, buyer must have 'owned their current home for at least five of the past eight years.
They' also must meet the same requirements for price and income. The credit is phased out for individuals with annual incomes above $125,000 and for joint income filers with incomes above $225,000. The program provides authority to the IRS to do greater oversight while processing the return and requires that the taxpayer claiming the credit be 18 or older.
Because of the deadlines, some buyers may look earlier than they had' intended in order to take advantage of the credit.
The key, Pinto said, will be to make potential buyers aware of the credit - - and the deadlines -- since lawmakers have said the credit won't be extended again.
"My advice to first time homebuyers or move-up buyers is to buy a home now. Don't wait. You won't see this benefit again in the near future," Pinto said.
