Maine Real Estate News

On November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers through June 30, 2010. The bill also expands the credit to others who are not buying a home for the first time.

Details:

The $8,000 first-time homebuyer tax credit, which was slated to expire Nov. 30, 2009, will be extended for contracts signed before May 1, 2010 that close before July 1, 2010. First-time buyers, who are in the process of closing now, no longer have to worry about qualifying for the $8,000 tax credit if they do end up closing after the Nov. 30 deadline.

The new legislation also increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the current level.

Buyers who already own a home are also now eligible for a tax credit and the purchase of a home. The $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years.

The legislation does set forth several provision including, limiting eligibility for existing homeowners to homes worth $800,000 or less, as well as making both credits available only for primary residences, not second homes or investment properties. The legislation will take effect November 7, 2009 and is not retroactive.

A comparison of side-by-side comparison of the new credit is available at Tax Credit Extension.pdf

Nationally, the original first-time homebuyer tax credit jump-started the housing market, driving home sales to the highest level in more than two yeas. The National Association REALTORS® reported sales jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2% higher than the 5.10 million-unit pace in September 2008.

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