Honey, Start Packing!

With the extension and expansion of the Federal homebuyer tax credits, both first-time homebuyers and existing homeowners wishing to either move up or downsize are eligible for tax credits up to $8,000.

As with all things income tax-related, there are rules and exceptions to deal with.

For both first time homebuyers and existing homeowners buying a new primary residence:

• Home purchased cannot be priced higher than $800,000. There is no phase-out of the credit above $800,000. At $800,001 there is no credit available.
• Home purchased must be used as a homebuyer’s primary residence.
• Income limits are between $125,000 and $145,000 for singles (starts to phase out after $125,000) and between $225,000 and $245,000 for marrieds (starts to phase out after $225,000).
• Purchase contract must be signed by April 30, 2010 and closed by June 30, 2010 in order to qualify for the credit.
• Homebuyers who claim the credit and then sell their homes within 3 years after the purchase date may be subject to the repayment of the credit. Homebuyers who remain in their homes for at least 3 years do not have to repay any portion of the credit.
• Purchases closed in 2010 may be claimed on the homebuyer’s 2009 tax return. Filing an extension of the 2009 tax return may make this easier, and include a copy of your escrow closing statement (HUD-1) with your tax return.

For first time homebuyers only:

• Credit available up to $8,000.
• Can not have owned another home as a primary residence for the last 3 years.
• New income limits were effective as of November 7, 2009. Purchases prior to that date are subject to the prior rules, with income limits set at $75,000 for singles and $150,000 for marrieds, and with no maximum amount for the home’s purchase price.

For existing homebuyers who are buying a new primary residence:

• Credit available up to $6,500
• Must have occupied the current primary residence for 5 consecutive years out of the last 8 years. Do not need to be occupying that home currently as long as the 5 consecutive years requirement is met.

Buying a home in the Santa Clarita Valley within the maximum purchase price restrictions:

Santa Clarita Valley’s inventory of residential real estate for sale remains very low. However, most of the inventory is priced under the $800,000 purchase price limit for claiming the homebuyer’s tax credit.

• As of November 8, 2009 there were 587 homes available for sale in the Santa Clarita Valley, including single family homes, condos, townhomes and manufactured homes (not trailers).
• As of November 8, 2009 there were 95 homes available for sale in the Santa Clarita Valley priced at $801,000 or higher.
• Areas with the majority of the higher-priced homes include Hasley Canyon (Castaic), Sand Canyon (Canyon Country), Newhall, Placerita Canyon (Newhall), Southern Oaks (South Stevenson Ranch), Stevenson Ranch and Westridge (Valencia.

Time frames and snags to watch out for:

With the closing date extended to June 30, 2010, many homebuyers may feel that they have plenty of time to find a home and close escrow before that date. However, since the Santa Clarita real estate market is dominated with short sales, you’ll need to allow at least a few months to close after you get an offer sent to the seller’s bank for final approval. Expect 30-60 days or more after your offer is submitted to receive the bank’s approval for the short sale, plus another 30 days for the standard escrow period plus another 15 days in case there are any snags in the loan process (common these days). That means that you’ll need to have your purchase contract submitted and accepted by the seller (pending bank approval) by March 15, 2010 if you’re buying a short sale.

Looking for a good Realtor? Santa Clarita Realtor Linda Slocum is a Certified Residential Specialist (CRS)  and a Certified Distressed Property Expert (CDPE) specializing in Santa Clarita residential real estate, bank-owned properties and short sales. You can reach her at 661.670.0349 or at homes@HoneyStartPacking.com.

Tags: $8000 tax credit, federal tax credit, first time home buyer, first time homebuyer, homebuyer tax credit, tax credit

This entry was posted by Linda Slocum on Sunday, November 8th, 2009 at 3:52 pm and is filed under First Time Homebuyers, Santa Clarita Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.