First Time Home Buyer Tax Credit For Phoenix Home Buyers Extended and Expanded.

November 06, 2009

Slow down, you now have until April 30th, 2010 to get the tax credit and until July 1st to close the transaction.

The Homebuyer Tax Credit has been extended to the jubilation of many and especially those buyer who waited to the last minute and risked missing free money. It's no longer called the First Time Homebuyer tax credit as it's also been expanded to include some current home owners, plus the income limits are up further enticing even more people to possibly buy a home or change a home.

This is definitely no reason to buy a home, but since it's being given out you might as well take advantage of it if you happen to be buying anyways.

Here are the details.

The credit for first time home buyers is good for up to $8,000 or 10% of the purchase price until the end of April 2010 and closed by July 1st 2010.

From enactment on December 1st 2009 the income limits increase. Before a single person who earned over $75,000 or $150,000 for a married couple was not eligible. Now this numbers have been increased to $125,000 and $225,000 respectively.

Interestingly before you did not have to prove you purchased a home to claim the credit, although it would be unwise to claim it without merit. Now the purchaser must attach documentation of the purchase to claim the credit.

The new tax credit now encompasses existing home owners. Current owners, "must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years." The credit is up to $6,500 and is meat to encourage move up buyers. I doubt this will work much to encourage people to move, but it might have a small impact. Turnover is good: it creates jobs.

This is of course mixed news: both good and bad. I doubt people will decline to take the credit even on principal. It's is a loan from the nation as a whole and all of us will have to pay for it.

I just don't get the paradoxical nature of this. On the one had we all scream at the meddling hand of the government, but when that hand has cash in it we don't mind or look the other way. Why are we so willing for the government to subsidise housing, but so hate it for shaking up health care? Is not health care even more important then home-owner ship.