Breaking news: New credits

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As everyone's patiently waiting for Senate' decisions on the housing issues and credits, Senators are working hard to move the new insentives forward. Did you hear the latest BREAKING NEWS:

Share the news and let us know what you think about it. How do you think will this issues effect you and economy?

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Although it's great to see first time home owners finally get to buy a home, sooner or later this and the irresponsible behavior by our federal government is going to have to stop or we are heading for disaster of biblical proportions. Over the past year, the federal government has launched this program, cash for clunkers, the stimulus package, and a multitude of other activities aimed at propping up the economy. But, they are BORROWING every penny they need to do this and the deficit is out of control. And at a time when they should be cutting federal spending, they are accelerating spending at a mind blowing rate.

Sooner or later, someone is going to face the task of paying back the money they are borrowing. Sooner or later elected officials are going to have to radically cut spending and radically increase taxes and those elected officials aren't going to be very popular with the voting public.

And to add insult to injury, the president proclaimed this week that the gross national product is up 3.5% and that is a sure sign the economy is recovering. The only reason the GNP is up is that the federal government is spending like a drunken sailor.

This is like me going on a buying spree with all of my credit cards and then saying, "I purchased a lot more this year than last year so financially I must be doing great."

How dumb do these people really think we are?

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Homebuyer Credit Gets New Life
Key lawmakers in the Senate have tentatively agreed to extend the existing $8,000 tax credit for first-time home buyers and also offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years.

Home buyers must be under contract by April 30, 2010, and close before July 1. House Democrats have expressed concern about the cost of the tax credit for the government, and allegations of abuse have resulted in an IRS probe of the program.

Source: Wall Street Journal, Corey Boles and John D. McKinnon (10/29/09)

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Still not a done deal. Looking like it's going to happen though.

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The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years. read more

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New York's REALTORS applaud Senators Schumer and Gillibrand for their leadership on homebuyer tax credit extension

Statement from NYSAR President Daniel J. Hartnett

On behalf of the 56,000 members of the New York State Association of REALTORS, today I express our sincere gratitude to Senator Charles E. Schumer and Kirsten E. Gillibrand for their vision and leadership in addressing the continued recovery of our housing industry and, ultimately, our economy.

Yesterday, Senators Schumer and Gillibrand voted to approve the extension and expansion of the homebuyer tax credit that was included in a wide-ranging piece of Senate legislation that extended unemployment benefits. Both Senators have a long-history of supporting REALTOR issues, and none in recent history has been more important than this tax credit. REALTORS know that the tax credit is working to revitalize the housing market and position it to once again lead our economic recovery.

The legislation extends the availability of the tax credit to purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction. The credit will remain $8,000 for first-time buyers, while repeat buyers who purchase between December 1, 2009 and May 1, 2010 will be eligible for a credit of $6,500. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years. Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.

We are hopeful that the House will pass this legislation in the near future and that President Obama will sign it into law.

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Frequently Asked Questions on the Homebuyer Tax Credit Changes


Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you're within the phase-out range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight what he did since 3 years doesn't impact eligibility.

Question: I am an eligible first time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.


Source Buffalo-Niagara Association of Realtors

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The new and extended Tax Credit Law is in effect as of November 7, 2009 For more information see and read chart: Click Here

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Why not to buy or sell now?

Tax Credits give an extra opportunity for both buyers and sellers. Learn more about tax Credits and Housing Links for new and repeat buyers.

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The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers.

For more information and answers reagarding the new law read here

Don't miss this historical opportunity. Contact me for more information and any real estate questions. Share the great news with others. Invest in real estate!