Continuance of Home Purchase Tax Credit

[fisherdog19]

According to news sources, it seems as if the current administration will do more to bolster the housing market and economic recover. Read below about the news I recieved via email.

"An extension of the $8,000 first-time home buyer tax credit appears all but certain after the Obama administration called on Congress to give house hunters more time to claim the popular tax perk. The move comes shortly after Senate lawmakers stuck an agreement to not only push back the measure's looming deadline but expand it to allow current homeowners and more affluent buyers to claim the credit. "We welcome efforts taken by Congress to extend the first-time home buyers tax credit for a limited period," Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan said in a joint statement today. "This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide

Extending the deadline: Although various proposals to extend and expand the credit have circulated in Congress for weeks, Senate lawmakers finally reached a deal in recent days. Under the terms of the agreement, the deadline for first-time home buyers to claim the $8,000 credit would be pushed back to April 30, 2010. But the term "deadline" doesn't mean the same thing as it does in the current credit. The Senate agreement stipulates that buyers must have a sales contract on a house by April 30 to be eligible, but it gives them an additional 60 days to close the purchase. That's much different from the current credit, in which transactions must be closed by November 30. Looked at one way, the effective deadline of the credit under this agreement is actually the end of June.

"More-affluent home buyers: The agreement also enables more affluent Americans to claim the tax credit. Senators moved to increase its annual income limits from $75,000 to $125,000 for single buyers and from $150,000 to $225,000 for married couples. These limits apply to both first-time and move-up buyers, although neither can purchase a home for more than $800,000 and still get the credit. Anyone taking the credit on a 2010 purchase can claim it on his or her 2009 tax return. And as long as home buyers live in the property they purchased via the credit for three years or more, the tax credit does not have to be repaid.

Existing buyers: But perhaps the most significant change is that current homeowners would become eligible for the tax perk as well. The current credit prevents home buyers who have owned a primary residence within the past three years from claiming the credit. The agreement, however, would allow current homeowners to claim up to $6,500 as long as the property they are vacating has been their primary residence for at least five years. Expanding the credit beyond first-time buyers is intended to boost home sales to "move up" buyers—those moving from one house to another—which some lawmakers, most notably Georgia Republican Sen. Johnny Isakson, argue is essential to a housing recovery."

[CJH]

If I am reading this correctly, I sold my first house we lived in for about six years, this past summer and moved up. So basically I bought too soon and got hosed?

[Scott M]

Peter,

Any word about moving the tax credit in the other direction, to those who bought before the 8K credit? I purchased previous to the stimulus bill and have a $7500 credit that is required to be paid back...I'd like to not have to pay it back. Are you hearing anything about that? A friend of mine said there were rumors that the "paying it back" part would be dropped.

[fisherdog19]

CJH, you pretty much missed the boat, just bad timing.

da chise- they are not requiring a payback on current credits, if you meet the criteria, I don't think they retro'd it back to previous credit's. You mean you purchased a home without calling me for a quote

If any of you have more detailed questions, contact the IRS directly or a CPA. I am by no means an expert, I know what pertains to my industry as it happens and I don't get much news in regards to anything other than how it effects the mortgage business.

The news I relayed is not set in stone, it needs to pass congress first.

[hanson]

Any word about moving the tax credit in the other direction, to those who bought before the 8K credit? I purchased previous to the stimulus bill and have a $7500 credit that is required to be paid back...I'd like to not have to pay it back. Are you hearing anything about that? A friend of mine said there were rumors that the "paying it back" part would be dropped.

I'm in the exact same situation. Nothing wrong with an interest free loan but what the heck, the credit changed 2-3 months after I had bought and now they are thinking of extending it to all sorts of new buyers as well.

Interesting article in the paper within the last few weeks about how half the people claiming this "credit" are fraudulent as well. Millions paid out to those who don't qualify. Would be nice for those of us who are legitimate to get a fair shake, probably should write my Congressman and complain.

[fisherdog19]

The problem with the fraud is that the government required no proof of purchase. They now require a signed settlement statement and additional documentation. The government should have known the crooks would come out of the woodwork for this one, it's free money for heavens sake. It's such a shame that there are so many unethical people in this country.