Senate Approves Extension of Tax Credit Closing Deadline
June 17, 2010 by Matthew Le Baron
Filed under Buyers
The U.S. Senate has passed an amendment that would extend the closing deadline of the homebuyer tax credit by three months.
Right now, qualifying homebuyers who were under contract by April 30 have until June 30 to close the deal. But because of the large volume of applications for lenders to process, concerns have begun to surface that some buyers may miss out on the tax break simply because of the backlogged pipeline.
The National Association of Realtors (NAR) says it has received reports that as many as a third of the buyers eligible for the credit have already been notified by their lender that they won’t make the June 30 closing deadline.
The Senate’s amendment, approved Wednesday by a vote of 60 to 37, would give homebuyers and their lenders until September 30 to complete their transactions.
The extension was proposed by Senate Majority Leader Harry Reid, whose home state of Nevada still holds the title of one of the most distressed housing markets in the country.
Reid says not only did the tax credit make it easier for thousands of Nevadans to purchase their first home, it helped reduce the state’s overblown inventory of residential properties.
But a statement on his Web site warns, “There is growing concern that because of the time it takes for banks to complete transactions such as short sales, many of these home purchases would not be complete before the deadline through no fault of the homebuyer.”
The measure granting an extension is part of a larger $140 billion jobs and tax bill currently under consideration by the Senate. A Senate vote on the full legislation is expected to come later this week or next week, and then it will be sent to the House for review.
“If Congress fails to act promptly, then prospective homebuyers might not get the benefit of the homebuyer tax credit, even though they have completed contracts,” NAR stressed in a recent letter to lawmakers.
Source dsnews.com
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Only 63 days left to claim the homebuyer tax credit!
February 26, 2010 by Matthew Le Baron
Filed under TrustIdaho.com Featured
Congress voted to extend and expand the First-Time Home Buyer Tax Credit program on November 6, 2009. There is only 63 days (as of Feb 26, 2010) to claim it.
The $8,000 tax credit expiration date has been pushed forward to Spring, requiring homebuyers to have an accepted written contract no later than April 30, 2010 and to be closed on the purchase by June 30, 2010.
“Move-Up” buyers were also provided an incentive to purchase with the expanded program. Homeowners that have lived in their current residence for five out of the last 8 years are eligible for a tax credit of $6,500. Don’t get confused by the “move up” lingo–a current homeowner can purchase a home that has less square footage and amenities than the current residence and still be eligible for the credit. For example, my folks have decided to move from their 3000-sqft home into a 1000-sqft town home and are eligible to receive the incentive.
The tax credit’s basic eligibility requirement remain the same:
- A home cannot be acquired through gift or inheritance
- A home cannot be purchased from an entity in which your are a majority owner
- All parties to the purchase must meet eligibility requirements
- A home cannot be purchased from a parent, spouse or child
There are some additional criteria that must be followed, as well.
First, the property being purchased cannot exceed a sales price of $800,000. Second, household income thresholds have been raised to $125,000 for those who file their taxes singly, and $225,500 for buyers that file taxes jointly.
Don’t forget that the incentive is a true TAX CREDIT—not a tax deduction. A tax filer who is eligible for the full $8,000 credit would receive a check from Uncle Sam for $8,000 if there is no tax liability for that particular year. What a time to buy!
A complete list of qualifying criteria is posted on the IRS website. It is important to review your qualifications with a tax professional in order to determine your eligibility.
Interest rates along with home prices are at an all time low. Contact Matt for additional information and/or to take advantage of this once in a lifetime opportunity: 208-869-3469.
Just over 60 days to go . . .
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