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Categorized | Tax Time

New tax credit includes current homeowners

Your home can house a terrific tax credit.

Your home can house a terrific tax credit.

(NAPS)—Many current homeowners can now qualify for up to a $6,500 home buyer tax credit. The initial success of the $8,000 first-time home buyer tax credit convinced Washington to expand the program and extend it until April 30, 2010. This extension, however, will be the last.

Under the extended home buyer tax credit, current homeowners are eligible as long as they have lived in their present residence for five consecutive years within the past eight. First-time home buyers who haven’t owned a home in the past three years are still eligible for up to an $8,000 tax credit. Singles who make up to $125,000 and married couples who make up to $225,000 can qualify for the full credit. Those who exceed those income limits may qualify for a reduced amount.

“The new provisions and modifications make an already enticing real estate market even more attractive and accessible. Interest rates are low and home prices are more affordable now than they have been in decades,” said National Association of Realtors® (NAR) Chief Economist Lawrence Yun. “There’s never been a better time for potential buyers to invest in their future through homeownership.”

Many areas are already seeing a rise in home prices and demand, with multiple bids on properties becoming more common. According to the NAR Profile of Home Buyers and Sellers, first-time home buyers became homeowners in record numbers over the past year, comprising 47 percent of all home sales between July 2008 and June 2009. This flood of activity helped shrink housing inventory levels. Reduced inventory is a sign the market is returning to a more balanced state and helps sustain home values.

Yun said that while the housing crisis isn’t over, the extended and expanded tax credit is a step in the right direction.
“The bottom line is that the housing market is doing much better now than one year ago, and the home purchases using the tax credit should continue to reduce inventory to acceptable levels. The extension is a big win for consumers, but to take advantage of this rare opportunity, would-be buyers need to get the ball rolling and contact a Realtor® who can help them on the path toward owning a home.”
For more information about the tax credit, visit www.HouseLogic.com/homebuyertaxcredit.

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