Unless you live in a cave I'm sure you've heard that the $8,000 federal tax credit for first-time homebuyers has been extended.
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But there's actually a new addition to the program that, unfortunately, seems to be getting second billing. It's a new credit that specifically targets established homeowners who are looking to get into a new home. Real estate agents are excited. You should be too.
"One of the great features of the program is "move up" buyers. If you've owned a home for five years of the last eight, consecutively, you're eligible to move up to a new home and you're eligible for a $6,500 credit," said Kevin Clancy, real estate broker.
And that $6,500 is available right now. It took effect the day President Obama signed it into law earlier last month. The term "move up" is a little misleading, however.
"This program is great for retirees as well, as long as they've owned their home for five years. They certainly can downsize and are eligible for the $6,500 tax credit," said Clancy.
Just like the original credit for first-time homebuyers, there are income restrictions. To be eligible for the $6,500 your adjusted household income cannot exceed $125,000 if you file singly or $225,000 if you file jointly.
Some other things to keep in mind when it comes to that "move up" credit whatever you intend to buy, the house cannot cost more than $800,000. The new house must become your primary residence. However, there is no requirement that you sell your current home. You could rent it out or make it a secondary home.
"The program's great because it covers your single family homes. As long as it's your primary residence you're good to go. I haven't had too many houseboat sales as a primary residence, but it does cover that as well," said Clancy.
Remember, there's no guarantee that Congress will provide for another extension. You should have a binding contract in place by April 30 and a settlement by the end of June. June 30 is the expiration date for both credits. For more information and all the particulars, log onto our website.
federalhousingtaxcredit.com