Military personnel and federal employees, such as members of the foreign service and employees of the intelligence community, are able to enjoy additional benefits when it comes to the homebuyer tax credit.
Typically, in order to claim the tax credit, eligible buyers must enter into a contract to purchase a principal residence by April 30, 2010, and close the transaction no later than June 30, 2010. However, according to the IRS, servicemen and women get an extra 12 months, allowing them until April 30, 2011, to sign a binding contract and until June 30, 2011, to close the purchase.
The extension is available to individuals or their spouses who serve on qualified official extended-duty service outside the country for at least 90 days between Jan. 1, 2009, and April 30, 2010. In order to qualify, only one spouse needs to be overseas during that time frame.
In addition to the extension, eligible members of the armed services, intelligence community or foreign service do not have to repay the credit if their home is sold or ceases to be a primary residence within the first three years as a result of orders sending them to a new duty station at least 50 miles away.
For more information, check out this link (it goes to the IRS’ website).
Here are the details:
First-time home buyers are eligible for up to $8,000 tax credit and move-up buyers who have owned their home, as their primary residence, for the past 5 consecutive years are eligible for a reduced credit of up to $6,500.
The income limits have been raised. Individuals whose incomes are $125,000 or below, and families earning less than $225,000
MAXIMUM PURCHASE PRICE
Must be under contract by April 30, 2010 and settle before June 30, 2010.
While not final yet, things are looking good for the first-time home buyer tax credit to be extended. The plan calls for not only extending the contract/closing date for first-time homebuyers, but also allowing repeat buyers to benefit. Here is an article from today’s Wall Street Journal that explains the proposal:
By COREY BOLES and JOHN D. MCKINNON
WASHINGTON — Senate negotiators reached a tentative deal to extend a tax credit for first-time home buyers, but its passage remains uncertain.
The agreement would extend the existing credit for first-time home buyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all home buyers who have been in their current residence for a consecutive five-year period in the past eight years.
Last week at this time, there was a flurry of conversation around the fact that the Senate had announced that they had approved a $15,000 tax credit for all individuals purchasing new homes (first time buyers and previous homeowners) in 2009, and that it would be a pure credit (would not have to be paid back like the previous version). This created an enormous wave of excitement…except for one thing…the House did not see eye to eye with them on this proposal.
Over the course of the last week, the subcommittees from the House and the Senate got together and ironed out a combined version that they could agree on, and felt would pass a vote on both floors. Unfortunately, the House did not see eye-to-eye on the housing proposal floated by the Senate, and much to the chagrin of the many in our sector, the initial proposal from the Senate was paired down significantly.
Under the Senate’s stimulus bill, homebuyers could receive a $15,000 tax credit if they purchase within a year.
By Les Christie, CNNMoney.com staff writer
February 10, 2009: 7:10 AM ET
NEW YORK (CNNMoney.com) — If you’re thinking of buying a home, there could be a big bonus for you in the economic stimulus bill that’s now before Congress.
The Senate’s version of the plan sweetened the $7,500 homebuyer tax credit provision proposed by the House, doubling it to $15,000 or 10% of the home’s purchase price (whichever is lower). What’s more, the credit applies to all buyers – not just those purchasing their first homes.
The Senate credit also has no income limits. The House version, in comparison, allows only those with incomes up to $75,000 for singles and $150,000 for couples to qualify for the full amount. (In that bill, those earning up to $95,000 and $170,000, respectively, can qualify for a partial credit.)
Also, unlike the tax credit passed last summer as part of the Housing Recovery Act, this one does not have to be repaid. The old credit acted more like a no-interest loan than a true credit and, as a result, had little impact on home sales.
By BRIAN BLACKSTONE and MAYA JACKSON RANDALL
WASHINGTON — The Federal Reserve on Tuesday held interest rates steady and in a disappointment to Wall Street didn’t appear to signal that rate cuts are forthcoming anytime soon.Though officials continued to warn about inflation risks, they also signaled that economic concerns have intensified in the wake of the collapse of Lehman Brothers Holdings Inc. and a steep selloff in equity markets Monday.
“The downside risks to growth and the upside risks to inflation are both of significant concern to the Committee,” the Fed said in a statement. (Read the full statement).
The Federal Open Market Committee voted unanimously to keep the target fed funds rate for interbank lending unchanged at 2% for a third-straight meeting. The Fed took no action on the discount rate for loans to brokers and commercial banks, which stands at 2.25%.
It was the first unanimous interest rate decision in one year. Dallas Fed President Richard Fisher, who had dissented in favor of higher rates the previous five meetings going back to January, voted with the majority this time.
Here are some key points about the First-time Homebuyer Tax “Credit”. It’s not really a credit, but an interest-free loan that must be repaid within 15 years.
Applies to purchases made on or after April 9, 2008, and on or before June 30, 2009.
Amount of Credit
10% of the cost of the home, not to exceed $7,500. This is calculated per property, not per individual.
Any single family home (inlcuding condos, co-ops, townhomes) that will be used as a principal residence.
The tax credit reduces income tax liability for the year of purchase and can be claimed on your tax return for that tax year.