New Home Buyer Federal Tax Credit… San Diego Home Buyers You need to know specifics.

San Diego Condo and Home buyers should understand the Federal Home Buyer Tax Credit that was extended by the Obama Administration back in November of 09.  It is very similar to the program that expired on November 30th.  Here are the basics of the new credit:

• First Time Home Buyers Tax Credit remains at a maximum of $8000.
• First Time Buyers are defined as any buyer that has not owned property within the last 3 years.
• Home Buyer tax credit for non-first time buyers is a maximum of $6500.
• Non-First Time Home Buyer definition requires that property being sold have been the primary residence for 5 consecutive years within the last 8 years.
• Eligible purchases must have a binding contract by April 30th and close no later than July 1st, 2010.
• Purchase price of home must be less than $800,000.
• Income limitations: Less than $125,000 for single buyer and less than $225,000 for married couple.
• Anti-fraud rule states that buyers are required to attach documentation of the purchase to your tax return.

Since the maximum credit is based on the price of the home, all San Diego Condo and Home purchases qualify for the maximum return.  Since we are in a market dominated by short sales, buyers looking to cash in on these final 4 months of credit opportunity should be out looking hard to enter escrow.  Short sale approval times are taking about 90 days.  So you have approximately the month of January for you to still squeeze out an eligibility with a short sale.  Traditional condo/home sales and foreclosure sales will still be do-able up to the last week in April.

Tara Steinke

Residential Real Estate Consultant

619-384-6014