Turns Out It WASN'T Your Last Chance for $8000... or $6500!

Just today, President Obama signed into law a new unemployment insurance bill, which includes an amendment to the First Time Homebuyer Tax Credit. The new law includes the following exciting changes that now even affect buyers who have already owned a home:

• The tax credit has been expanded to include homebuyers who are selling a home that they've lived in as a primary residence for 5 consecutive years of the past 8 years (repeat buyers)
• Repeat buyers are now eligible for up to $6500
• The new deadline for the credit is April 30, 2010 (instead of Nov 30, 2009). This deadline will now apply to all sales with binding contracts signed by this date - not just properties that have actually closed by this date. This means that if you plan to close by April 30 and the closing gets pushed back a few days, you may still qualify for the credit since you already have a binding contract.
• First time homebuyers are still eligible for up to $8000
• Income limits have been increased to $125,000 for single filers and $225,000 for married filers
• The maximum home purchase price to be eligible for the credit is $800,000

Some FAQ about this credit:

Q: I am a "repeat buyer". Must the new house that I purchase cost more than the old house I sold?

A: No, repeat buyers also include those who are "downsizing", or spending less on the purchase than they got on the sale.

Q: I owned and lived in my home for 10 years. 2 years ago I sold it and have been renting. If I buy a home before April 30, 2010, will I still be eligible for the $6500 (assuming I meet all other criteria)?

A: Yes. You owned and lived in your home for 5 consecutive years of the last 8 years so you qualify as a repeat buyer in that respect.

Q: I am purchasing a home for $815,000. Am I still eligible for at least a portion of the $6500 repeat buyer credit (assuming I meet all other criteria)?

A: No. The credit limits the purchase price at $800,000. This is a hard maximum (not a phase-out), so any purchases above $800,000 will disqualify you from claiming this credit.

As always, please consult your tax professional to discuss your eligibility for either of these credits and your particular situation. Do not hesitate to contact me if you'd like to discuss the possibility of buying or selling property in time to claim this credit. I'd be happy to discuss your situation with you or refer you to a great agent in your area!