Archive for the ‘$6500 tax credit’ Category

Homes for Sale in St. Augustine: Tax Credit Deadline Ends Today?

Wednesday, June 30th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Follow us on Facebook.

UPDATE: This just in from the National Association of Realtors:

To: All REALTORS®

From: Vicki Cox Golder, 2010 NAR President

Date: July 1, 2010

We are happy to report that Congress has passed a bill extending the Homebuyer Tax Credit closing deadline to September 30, 2010.  This is a huge win for REALTORS® and homebuyers, and NAR worked closely with members of Congress to make it happen.

The extension applies only to transactions that had ratified contracts in place as of April 30, 2010, and have not yet closed.  There will be no gap between June 30 and the date the President signs the bill into law. 

Well, this is the day the $8,000 tax credit deadline for first time homebuyers and the $6,500 credit finally comes to an end.  Or is it?

According to a press release sent out by the National Association of Realtors, the U.S. House passed HR 5623, the Homebuyer Assistance and Improvement Act of 2010, yesterday.  The vote was 409-5. This bill extends the deadline for closing tax credit eligible transactions from June 30 to September 30, 2010.

This is great news…especially for the folks who’ve got tied up in home sales that have run long (especially short sales).   

The bill now moves to the Senate where the outcome is much less certain.  Republicans in that branch of Congress famously filibustered unemployment benefits last week, along with the National Flood Insurance Program.  And they can’t seem to vote on Wall Street reform.  One would hope that the Senate will get off their keisters and at least extend this tax break and help home buyers out.

The contracts still need to have been written by April 30, 2010.  However, if you’re active duty military posted overseas between 2008 and 2010, you have until next April 30 (2011) to write the contract, and until next June 30 to close.

St. Augustine Homes for Sale: $8000 Tax Credit Extended to Active Military Overseas

Saturday, April 24th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com). Become a fan of ours on Facebook.

Think the tax credit is done? Not so fast!

U.S. military personnel who are out of the country for 90 days (since 2008) may have an extra year to get the tax credit, up to $8,000, for buying a home. The active-duty rule is not new. It’s part of the current tax credit law, though its use is limited. The qualification must be for “official extended duty outside the United States for at least 90 days after 2008 and before May 1, 2010.” Should that be the case, the homebuyer has an extra year to buy a home. He or she has until April 30, 2011, to secure a binding contract, and until June 30, 2011 to close on the home. Other conditions such as a maximum $8,000 for first-time buyers and $6,500 for move-up buyers still apply.”

St. Augustine Homes for Sale: Short Sale + Tax Credit Deadline = Risky Bet

Wednesday, March 3rd, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com)

For our last post we did a synopsis of the $8000 first time buyer and $6500 repeat buyer tax credits, which expire on April 30.

So now you realize you need to get a home under contract by April 30, and close on it before July 1st, and the home of your dreams just happens to be a short sale.

Well, in the immortal words of Dirty Harry, “Do you feel lucky?”

A short sale home is one where the seller owes more than it is worth.  When a buyer is secured, negotiations start with the lender or lenders to see if they would be willing to accept less than is owed on the house.  From the time the purchase and sale contract is signed until the property closes usually takes a minimum of 120 days, or four months.  Quite a few take longer.  Very few take less.

So if you’re looking at taking the tax credit and close on a short sale by July 1, you’re taking a serious risk at missing the tax credit if the deal goes long.

Here’s some things to consider:

  • Will the short sale price be enough better than a straight sale price to offset the loss of the tax credit?
  • Will a straight sale price + the tax credit be a better deal than the short sale by itself?
  • How will I feel if I put an offer in on a home and it falls apart after April 30, when I can no longer take advantage of the tax credit?

It’s your money, boss, spend it wisely.

St. Augustine Homes for Sale: The Tax Credit Deadline Looms!

Monday, March 1st, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com)

The $8000 new buyer tax credit and $6500 repeat buyer tax credit expires in 60 days (April 30)…so you better get in the market now if you want to take advantage of it!  Here’s the need to know:

You must have a binding, written contract by April 30, but the deal can close as late as July 1.

First time buyers get a $8000 tax deduction, “repeat buyers” get a $6500 tax deduction.  The tax credit can be applied to PRIMARY residences (not investments), that include townhomes, single-family homes and condos.  To qualify as a first time buyer you cannot have owned a home three years prior to the purchase.  To qualify as a repeat buyer you must have lived in your principal residence five of the last eight years…you do not have to sell your current residence but you do have to vacate it and make the purchase home your primary residence.  This is an excellent deal if you were planning to turn your current home into a rental after you move.

If you want to buy a short sale and use the tax credit you run the risk of losing the credit.  On average, it takes about 4 months (120 days) to successfully complete a short sale…some take longer.  If you are counting on the tax credit, best just to buy a home that is not a short sale.  However, since short sale homes can recognize significant savings, a short sale might actually put more money in your pocket than a straight sale with the tax credit, but that’s for you to decide.

There are income limits.  The full credit is only available to persons with $125,000 ($225,000 joint filers) modified adjusted gross income.  Those between $125,000 and $145,000 ($225,000 and $245,000 joint) modified adjusted gross income qualify for a reduced credit.  Higher incomes do not qualify.

You can apply the credit to this year’s tax return if you file before April 15, or file an amended 2009 return.  Otherwise you file it on your 2010 taxes.

I borrowed heavily from an excellent article in this month’s Realtor magazine to produce this piece.   

Call St. Augustine Team Realty today to take advantage of this deal…maybe the only free money you will ever see from the government!  You can call agents Suzie Hancock at (904) 521-2603 or Sondra Sparapani at (904) 209-8320, or call Ron, Kate or Sean at (904) 825-0099.

St. Augustine Real Estate: $8,000 Tax Credit Extended, Expanded

Friday, November 6th, 2009

by Sean Hess, broker and manager, St. Augustine Team Realty

The tax credit extension for first-time home buyers (or those who have not owned a principle residence in the last three years) was approved by Congress Thursday, and is expected to be signed into law by President Obama today. 

It was scheduled to expire on the 30th of this month, but now has been extended to April 30, 2010.  In addition, the home does not have to close by April 30th, but a bona fide contract for sale and purchase does need to be signed by April 30.  The closing has to take place by July 1, 2010.

A new tax credit of $6500 has also been created for those buyers who already own homes.

To qualify you have to have lived in the home you are selling for five of the last eight years.  

Based on just what I see, you have to sell the home you are living in now to take advantage of the tax credit.  In other words, you can’t buy a new home, take the tax credit, and continue to own the original home (as an investment property).  But I’m sure that will be clarified in the upcoming weeks.

Great news for real estate, great news for buyers, great news for sellers all around!