Hands On The Heartland
Checking The Pulse Of The Kansas City Real Estate Market
President Obama has now signed the bill that extends the tax credit for First Time Home Buyers AND now offers a tax credit to existing homeowners as well. First Time Home Buyers – defined as anyone who has not owned a home in the past three years – will fall under the same guidelines as the previous Tax Credit— meaning a 10% credit based on the purchase price of the home, up to a maximum saving of $8,000.
For existing homeowners – defined as homeowners who have owned a home at least 5 of the past 8 years – the tax credit is a slightly less grand $6,500. Still it’s much better than the big fat zero that existing homeowners were offered in the previous tax credit. This new (extended) tax credit further mortgages our country’s future but I think you’d be silly not to consider it since it’s now a reality and because of the huge financial benefits that can be realized. Now, if you make over $125,000 ($225,000 for couples), then you’re SOL. The old restrictions were $75,000 for individuals and $150,000 for couples, so this tax credit does appeal to a broader scope of home buyers. If you are not sure whether you qualify for the tax credit, you’re highly encouraged to contact a tax adviser to go over your situation. Although I stayed at a Holiday Inn Express last night, I’m not a CPA. You can also compare the old and new tax credits on this easy-to-read National Association of Realtor comparison sheet.
To go into a little further detail, the deadlines to purchase a Kansas City home and qualify for the tax credit are as follows: home buyers must go under contract prior to 4/30/10 AND close prior to 6/30/10. I especially like the armed forces provision I’ve seen, which allows our military stationed outside of the U.S. (and meeting some additional guidelines) to have their eligibility extended to going under contract prior to 5/01/11 and closing prior to 7/01/11. Very nice! In case you’re curious, the bill signed by the President today previously passed the Senate by a vote of 98-0 and passed the House by a vote of 403-12! One more thing… if you’re thinking of purchasing a million dollar home at the Lake of the Ozarks, forget about it. The sales price of the home can NOT exceed $800,000 and the tax credit does not apply to second homes. You can learn other do’s and don’t on the Realtor Action Center Tax Credit Q&A.
Posted by Jason A. Brown
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