If you’ve watched the news lately, or read the thousands of news articles and blog posts that hit the internet this past week, you’ve probably heard that the First Time Homebuyer’s Tax Credit has been extended to September 30th, 2010.
This new legislation, passed by congress last week, will allow thousands of new homebuyers to take advantage of the $8,000 and $6,500 tax credits that expired on June 30th, 2010.
The new extension gives first time homebuyers who entered into a purchase agreement before April 30th, 2010 until September 30th, 2010 to close the deals on their homes.
Please note: Only the deadline has changed. The same income restrictions and rules apply for the new extension.
Who is Eligible for the First Time Homebuyer’s Tax Credit Deadline Extension?
You are only eligible if you are a first time homebuyer who entered a purchase agreement before April 30th, 2010. A first-time homebuyer is a person who not owned a principal residence during the 3-year period prior to the home purchase. For married couples, the law tests the home ownership history of both the homebuyer and their spouse.
So, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time homebuyer tax credit. If you have only owned a vacation home or rental property not used as a principal residence this will not disqualify you as a first-time homebuyer.
Why Did They Extend the First Time Homebuyer’s Tax Credit?
Originally, the tax credit was available to those who entered into a purchase agreement prior to April 30th, 2010 and who closed on their home before June 30th, but due to the large number of distressed home sales, many borrowers had difficulty closing on their homes prior to the deadline.
The National Association of Realtors (NAR) has estimated that up to 180,000 homebuyers entered into purchase agreements before April 30th, but missed the June 30th deadline, and are still eligible for the tax credit.
By my estimation, that means banks and lenders will need to close over 2,700 transactions every business day until September 30th.
Wow.
If you have more questions about the First Time Buyer Tax Credit, or the deadline extention, feel free to contact me @ 562-364-9505 or mark@shandrowgroup.com
Sincerely,
Mark Shandrow
Real Estate Broker
office 562-364-9505 ext 100
mark@shandrowgroup.com
Shandrow Group
3970 Atlantic Ave., 210
Long Beach, CAÂ 90807
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