HOMEBUYER TAX CREDIT EXPANDED; EXTENDED TO APRIL 2010

CHARLESTON, SC—(November 6, 2009) The deadline for buyers to take advantage of the first-time homebuyer tax credit has been extended to April 30, 2010 and new provisions have been added to include a credit for existing homeowners.

An $8,000 tax credit is available to first-time homebuyers. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years prior to purchase to meet first-time homebuyer definition. A $6,500 credit is available to homebuyers who have owned and lived in that home for 5 consecutive years of the last 8 years.

Any single family residence (including condos, co-ops and townhouses) that will be used as the principal residence and has a purchase price of less than $800,000.

The full amount of credit is available for individuals with adjusted gross income of no more than $125,000 or joint gross income of no more than $225,000. The credit is phased out to lower amounts for individuals and joint filers with higher gross incomes.

The previous agreement required that buyers close on their home by November 30 to qualify for the credit. The expanded agreement gives buyers until April 30, 2010 to ratify a contract and requires that the closing take place within 60 days. The existing home buyer tax credit takes effect immediately, which means all qualified buyers under the new law with an upcoming closing is eligible for the credit as well.

“The Charleston market has maintained a strong momentum coming out of the summer season—due in large part to the tax credit—and we cannot let this momentum lag. This crucial expansion allows all homebuyers to make an investment in a market that is more affordable than it’s been in years” said Ralph Wetherell, President of the Charleston Trident Association of REALTORS®.

The tax credit, in its original form, helped to establish more than one million families as new homeowners.

“The homebuyer tax credit has been a critical component to restoring the health of the Charleston real estate market. We’ve been showing signs of a recovering market since this summer—inventory is decreasing and prices continue to stabilize. Extending this credit, not just in timeframe, but to a new group of homeowners will certainly support the continued economic recovery of our area” said Wetherell.

Contact:
Meghan Weinreich
(o) 843.760.9400 x110 (c) 843.270.4393

With nearly 4,000 members, CTAR’s mission is to promote the highest standards of professionalism, ethics, education and technology, and to ensure that its members are the primary source for real estate services in the South Carolina Lowcountry. Only those who are members of the Association of REALTORS® and its parent organizations are called REALTORS®. To learn more, visit www.CharlestonRealtors.com



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SENATE CLEARS NEW HOMEBUYER TAX CREDIT

Homebuyer Tax Credit: Congress Gives New Buyers A $6,500 Break
STEPHEN OHLEMACHER 11/ 5/09 07:53 AM AP

WASHINGTON — Buying a home is about to get cheaper for a whole new crop of homebuyers – $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House could vote on the bill as early as Thursday.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers – or anyone who hasn't owned a home in the last three years – would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.

"We are still in a world of economic hurt, and Congress must continue to act boldly and creatively," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "With the right mix of tax breaks and investments we will get through this recession and get folks working again."

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate by a 98-0 vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.

"For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home," Bond said. "And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place."

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

Expanding the tax credit for money-losing companies is projected to cost $10.4 billion.

The business tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years, giving them refunds of taxes paid in those years. Under current law, businesses with annual gross receipts of more than $15 million can claim losses back only two years.

The tax break would help industries suffering losses in 2008 or 2009, including retailers, homebuilders and newspapers. Congress included a scaled-back version of the tax break – for companies with revenues of $15 million or less – in the economic recovery package enacted in February. The new tax break would be available to companies of any size, providing a quick source of cash.

The U.S Chamber of Commerce has been a big backer of the tax break for money-losing companies.

"It frees up capital that they can use to maintain jobs and potentially even hire new people as the economy returns," said Caroline Harris, senior tax counsel for the U.S. Chamber of Commerce.

The tax breaks would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes. It was passed in 2004 and originally was to have taken effect this year, but would now be delayed until 2018.

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The bill is H.R. 3548.



Read more at: http://www.huffingtonpost.com/2009/11/05/homebuyer-tax-credit-cong_n_346632.html&cp