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Wednesday, November 11, 2009

Homebuyer Tax Credit Extension

With the extension of the homebuyer tax credit we hope to see the real estate market continue to have steady activity. The new credit was lowered from $8000 to $6500 but homeowners who have lived in their residence for five years are also eligible to the tax credit.

*There must be a written, binding contract to purchase a property in effect on April 30, 2010. The purchaser will have until July 1, 2010 to close.

Frequently Asked Questions:

Q: I am an existing homeowner. On October 25, 2009 I signed a contract to purchase a property. I have lived in my current home for more than five consecutive years and am within the new income limits. I will close on November 25. Will I qualify for the new credit?

A: YES. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of the contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Q: I am an eligible first time buyer. I entered into a contract to purchase on November 1, 2009. Do I have to close before December 1? How does the extension affect me?

A: You do not have to close before December 1. Due to the extension it is as if the November 30 deadline never existed.

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