Home Buyer $8000 Credit Due to Expire Soon

For more information or questions regarding how to get this credit visit us at http://www.metrovisions.com

The $8,000 tax credit that's helped thousands of Illinoisians move into their first home expires November 30th, but there are several bills on the table to extend the credit through the middle of next year.
More than $1.4-million taxpayers across the United States have benefited from the tax credit so far. Today's THV spoke with professionals on both sides who gave us insight into the pros and cons of extending the tax credit.

The first time home buyer tax credit is set to expire November 30th unless congress passes an extension. Maurice Taylor says, "It's being introducing into legislation and from everything I hear it is very favorable to pass."

Managing Broker, Maurice Taylor with Crye-Leike says the new Bill will extend the credit through May 2010 and it's critical to get the local and national economy where it needs to be, while making home ownership more accessible.

He continues, "I've been in the real estate business for 10-years and the month of October has been the largest volume month I have ever had. It is in direct correlation with the $8,000 tax credit."

State Economic Forecaster Michael Pakko with UALR says, "But you also have to consider the cost as well. Clearly somewhere down the road we have to pay for these subsidies. That means a larger deficit or somewhere down the line higher taxes or less spending in other areas."

Pakko says it's had a positive effect on the market, but at some point the government needs to let the market stand on its own. "Part of the big build up we had in housing and in the real estate markets was attributable to government policy to encourage home ownership," Pakko adds

Taylor says there won't be many incentives without the tax credit and the current ripple effect creates jobs. He says, "Once a house is sold there are a number of things that have to happen, you have appraisers, inspectors, people doing repairs, construction workers, new furniture; all of those things that go along with owning a home."

Pakko adds, "The hope would be once this program has had its impact that the housing market would be on a self sustainable path."

Taylor says there is also a possibility to make all homebuyers eligible, possibly making business quadruple, but Pakko says that would be poorly targeted because it would add to the deficit and give credit to homebuyers who would buy a home anyway.

Currently, the credit phases out for individuals earning more than $75,000 and married couples earning more than $150,000.

November 15th, 2009

(MoneyWatch.com) This story, by Ilyce Glink, originally appeared on CBS' Moneywatch.com


By now you've heard that President Obama signed the law extending and expanding the first-time home-buyer tax credit, opening it up to many current homeowners and expanding the income limits. Even if you don't plan to buy or sell a home soon, the credit could affect your finances in a big way.

Here's what you need to know to make the home-buyer tax credit pay off for you.

Who Qualifies ...

Under the new rules, there are actually two credits:

First-time home buyers with adjusted gross incomes up to $125,000 (singles) or $225,000 (married) can get the full $8,000 tax credit if they purchase a primary residence before June 30, 2010 and haven't owned a home in the past three years. The credit shrinks if your income is over those levels and is not allowed once income hits $145,000 for singles or $275,000 for married couples.

Current homeowners can snag a credit of up to $6,500 if they've lived in their primary residence for five concurrent years out of the past eight, meet the same income thresholds as first-time buyers, and purchase a primary residence before June 30, 2010.

... And Who Doesn't

In addition to buyers who top out the income limits, there are a few other buyers who are excluded.

Luxury market: You can't use the new tax credit to buy a property that costs $800,000 or more.

Vacation or investment homes: You can't claim the credit to buy a second home, vacation residence, or investment property.

Also worth noting: You can't take the credit if you acquired the home as a gift or inheritance or from your spouse, parents, grandparents, children, or grandchildren.

How Long Do You Have?

The new extension actually pushes the deadline back an additional seven months. Although the credit technically expires on April 30, 2010, if you have a binding contract by that date and close by June 30, you'll still qualify. (The original credit was due to expire November 30, 2009.)

Members of the U.S. armed forces, military intelligence, or foreign service on qualified extended duty get an extra year to take either credit. And if you or your spouse has been deployed overseas for 90 days or more in 2008 or 2009, you have until April 30, 2011 to claim the tax credit.

When Do You Get the Credit?

Glad you asked: Buyers don't actually have to wait to file their 2010 returns to get the credit. As long as you buy a home in 2010 before the program expires, you can claim the tax break on your 2009 federal tax return.

Is There a Catch?

The feds don't want to be seen as helping house flippers, so if you take the credit, you will need to stay put. If you sell the home or move to a different primary residence within three years of closing, you'll then be forced to repay the tax credit.

Advice for Buyers

If you're married and never owned a home, but your spouse owned one within the past three years, the two of you won't qualify for the $8,000 first-time home-buyer credit. You will qualify for the $6,500 credit for current homeowners, assuming you both meet the other requirements.

But if you want to buy a house with your child, the credit's available even if you already own a primary residence. Your child will get the credit of up to $8,000 as long as he or she meets the other qualifications - even if you own half the property.

What If I'm Not in the Market?

Even if you're not shopping for a home, the credit is likely to offer you a payoff.

Sellers: If your house is priced below $800,000, be sure to include language in your selling materials and online, reminding both first-time and trade-up buyers that your home may help them qualify for the credit.

Homeowners: Even if you're not planning to buy another house soon, the credit could help your net worth. The first iteration of the credit certainly seemed to have an impact - the National Association of Realtors says first-time buyers accounted for more than 45 percent of home sales in the past year. If the new tax credit works as well, it could aid the sales of hundreds of thousands of additional homes, sopping up more of the excess inventory. And that's exactly what you want to happen: Your home value can't begin to rise until the other homes in your neighborhood are sold.