Move up Buyer Tax Credit Expected to Boost Real Estates Middle Market

On November 6th, the Worker, Homeownership and Business Assistance Act of 2009 was extended to include an addditional 6 months for the First Time Home Buyer Tax credit of $8000, and a new $6500 tax credit for those that already own a home and wish to upgrade between now and April 30, 2010.   This news is expected to positively impact the housing market, with a specific focus on the group who would traditionally by moving to their next larger home to meet the demands of a growing family.

In concert with these incentives, it continues to be a great time to buy.  Inventory is in great supply and their is competition among sellers that want to move their homes to negotiate and get into a transaction.   The move up buyer tax credit is expected to provide a much needed boost specifically to the luxury home industry.   With prices down, and sellers becoming more realistic on the times in front of us, coupled with the tax credit and historically low interest rates, there has never been a better time to purchase a home in the previous decade.

Here are some highlights of the Move Up Buyer Tax Credit comment to the Act for quick reference

• Credit is calculated as a 10% credit up to a maximum of $6500
• The income limit to qualify is $125,000 for an individual and $225,000 for a married couple filing taxes jointly, using the Modified Adjusted Gross Income calculation.  There is some consideration above this income cap but there is a phaseout of $20K on both brackets.
• The maximum purchase price of the home can not exceed $800,000
• The closing for a qualified transaction does not have to occur until June 30, 2010 provided that their is a bonafide contract to purchase in place by April 30, 2010.  This should make it possible for new construction products to benefit from the stimulus.
• A taxpayer can claim the credit on a previous years tax return by filing an ammended return.

For more information, please visit the following link for answers to Frequently Asked Questions:

http://www.federalhousingtaxcredit.com/faq2.php