REAL Trends, Sept 22, 2009.

Nearly 40 percent of first-time homebuyers said they would not have bought a home if the federal tax credit for first-time homebuyers was not offered, according to the California Association of REALTORS® (C.A.R.) "2009 First-time Home Buyers Tax Credit Survey."

Supporting that theory, the IRS recently released a report that about 1.4 million taxpayers have filed (or amended) their 2008 income tax returns claiming the $8,000 first-time homebuyer tax credit. This is roughly consistent with NAR's projections that about 1.8 million taxpayers will claim the credit. NAR also estimates that at least 355,000 of eligible sales would not have occurred without the credit.

Other key findings from C.A.R.'s survey include:
Ninety-four percent were aware of the federal first-time buyer tax credit.
Eighty-two percent listed the ability to obtain financing as "very important" or "most important."
Ninety-one percent reported low home prices as "very important" or "most important."
Twenty-six percent planned to use the tax credit to purchase home furnishings and 12 percent planned to use it for home improvements.

 

Housing Affordability and Stabilty Package

The Homeowner Affordability and Stability Plan is part of the President’s broad, comprehensive strategy to get the economy back on track. The plan will help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure. In doing so, the plan not only helps responsible homeowners on the verge of defaulting, but prevents neighborhoods and communities from being pulled over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs. The key components of the Homeowner Affordability and Stability Plan are: Read on

Homebuyers $8,000 Tax Credit Extended through April 30, 2010

On November 6, 2009, President Obama signed into law an extension of the $8,000 first-time homebuyers tax credit until April 30, 2010. Binding contracts for the purchase of a principal residence signed by April 30 must close by June 30 to qualify in order for the first-time homebuyer to qualify for the credit. For qualifying purchases in 2010, taxpayers will have the option of claiming the credit on either their 2009 or 2010 return.

The new law added several new provisions that apply to persons purchasing homes on or after November 7, 2009:

• Homebuyers with higher incomes can now qualify for the credit for homes purchased after November 6, 2009. Income limits have been increased to $125,000 for individuals and $225,000 for couples filing jointly. These income limits were formerly $75,000 and $150,000, respectively. The credit phases out for individual taxpayers with a modified adjusted gross income between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers.
  
• The new law adds a $6,500 credit for long-time homeowners who want to trade up, that is, current home owners who have lived in their home for five of the past eight years and who buy a replacement principal residence by April 30, 2010.
  
• Qualifying home purchase prices must not exceed $800,000.
  
• The extended tax credit for first-time homebuyers remains at $8,000 and requires that the buyer have not owned a home in the past three years, as before.
  
• Purchasers claiming the credit will need to attach documentation of the transaction to their tax returns in order to help combat the tax credit fraud that has been experienced by the IRS to date.

Have questions about the tax credits? Read on

For a quick look at what has changed see the following chart.