Frequently Asked Questions $8000 / $6500 Home Buyer Tax Credit

Is a Tax Credit Calling Out to YOU?

The has been a lot of talk about the tax credit over the past few months. At first the Credit was to end tomorrow, December 1, 2009, but that now has been extended. In addition, certain homeowners are now entitled to a Tax Credit of $6500 if they purchase a new home, only if they have lived in their current home 5 of the last 8 years.

Both tax credits have been extended until April 30, 2010.

The credit applies only to homes priced under $800,000.

The bill raises the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

First time buyers have been taking advantage of this offering for the past months. It has caused quite a stir in our entry level real estate market. We have had more buyers that appropriate properties. Many homes that wouldn’t ordinarily sell to first time buyers, like fixer-uppers were selling and at a premium price due to competition in the market.

Now with the extension and expansion of the TAX CREDIT many more buyers, particularly the existing move up buyers will be able to get into the Denver real estate market.

Fueling the entry level market has been good, not just for first time home buyers, but for the move-up buyers too. Now with an extension and expansion, more buyers will be able to take advantage of the spring market. This is very good for the sellers who have been waiting on the sidelines for the market to improve.

If you or someone you know wants to buy a home, be sure to study the facts first. I’ve attached a Frequently Asked Questions prepared by the National Association of Realtors which is very helpful.

Here’s a handy graph outlining some common facts regarding the $8000/6500 Tax Credit.