Charleston Homes For Sale - Mount Pleasa


HOMEBUYER TAX CREDIT Extension & Expansion Info - Dec 2009

As Modified and effective November 6, 2009.

PROVISIONS EFFECTIVE FOR PURCHASES ON OR AFTER NOVEMBER 6, 2009 AND A RATIFIED CONTRACT ON OR BEFORE APRIL 30, 2010 (CLOSING MUST OCCUR WITHIN 60 DAYS OF APRIL 30, 2010)

FIRST-TIME HOMEBUYERS

An $8,000 tax credit is available to first-time homebuyers. Purchaser (and purchasers spouse) may not have owned a principal residence in 3 years prior to purchase to meet first-time homebuyer definition.

EXISTING HOMEOWNERS

A $6,500 credit is available to homebuyers who have owned and lived in a home for 5 consecutive years of the last 8 years.

ELIGIBLE PROPERTY

Any single family residence (including condos, co-ops and townhouses) that will be used as the principal residence.

REFUNDABLE

Yes. Reduces (or, can eliminate) income tax liability for the year of the purchase. Any unused amount of tax credit will be refunded to the homebuyer.

INCOME LIMIT

Yes. Full amount of credit available for individuals with adjusted gross income of no more than $125,000 or joint gross income of no more than $225,000. The credit is phased out to lower amounts for individuals and joint filers with higher gross incomes.

PURCHASE PRICE LIMITATION

The credit is available only for the purchase of principal residences with a purchase price of $800,000 or less.

RECAPTURE

None, unless the home is sold within three years of the purchase. If the home is sold within three years original purchase, the entire amount of credit is recaptured upon sale. Recapture provision is waived for military personnel relocating due to orders.

MILITARY PERSONNEL

Credit extended for one year after expiration date for any military personnel that is serving outside United States for at least 90 days in either 2009 or 2010.

TERMINATION

Must have a ratified contract on or before April 30, 2010 and close within 60 days of April 30, 2010.

ANTI-FRAUD MEASURE

Purchaser must attach documentation of sale to tax return.

EFFECTIVE DATE

December 1, 2009

Frequently Asked Questions - Nov 2009

As Modified and Effective November 6, 2009.

PROVISIONS EFFECTIVE FOR PURCHASES ON OR AFTER NOVEMBER 6, 2009 AND A RATIFIED CONTRACT ON OR BEFORE APRIL 30, 2010 (CLOSING MUST OCCUR WITHIN 60 DAYS OF APRIL 30, 2010)

FIRST-TIME HOMEBUYERS

Q: 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?
A: Yes. The new income limitations went into effect as soon as the President 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).

Q: 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?
A: 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. EXISTING HOMEOWNERS

Q: Existing homeowner credit: Must the new house cost more than the old house?
A: 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.

Q: 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?
A: 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.


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

Q: 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?
A: 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.


Thank you for visiting today. If this is your first visit, take your time and look around. I have unlimited information and resources available to you. If you are a return visitor, thank you!  I would love to hear from you and answer questions you have about the Greater Charleston area and the local housing market. Experience works!

Thank you for visiting today. If this is your first visit, take your time and look around. I have unlimited information and resources available to you. If you are a return visitor, thank you!  I would love to hear from you and answer questions you have about the Greater Charleston area and the local housing market. Experience works!

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