$8,000 Tax Credit Extended to Home Buyers

Have you heard the great news? The $8,000 tax credit extended for home buyers is now a reality. Those who could not close on their homes by the June 30, 2010 deadline now have an extra 90 days. The approval came after the bill containing this extension was changed and the provision for more unemployment benefits was excluded from the second bill. The $8,000 tax credit extended for home buyers is what approximately 180,000 people were waiting to hear.

This will allow them more time to close on the home they want to buy and they will still be allowed to take the tax credit. This was a major concern of many new home buyers. With the $8,000 tax credit extended, purchasers of homes will now have a deadline of September 30, 2010. With the expiration of the credit looming, there were worries this was responsible for the figures in May showing decreasing sales of new homes as well as existing ones. In addition the foreclosures and amount of inventory is not improving.

The hope is now that the tax credit has been extended this could be a good thing for the housing market. The tax credit is available for new home buyers that were under contract before April 30, 2010. It also includes existing home buyers who have owned and lived in a home for five years of the last eight and have not owned another home in the last three years. They are eligible for a $6,500 tax credit.

The one thing that was being made clear was this extension did not affect the date that the contract had to be in place. This extension is only for those who had a contract by April 30, 2010 and had not been able to close on their home for one reason or another.

The National Association of Realtors was involved with lawmakers every step of the way and was pleased with the job they accomplished in getting this extension passed for home buyers. In addition, the IRS is releasing more information on what is needed in the way of documentation when the credit is applied for – a contract signed by all parties, date of the contract, price of the home and the address of the property.

By turning in all of the required information, there will be fewer delays in processing the credit. Home buyers will also have to fill out a Form 5405, First Time Home buyer Credit and Repayment of the Credit. Included with the other documentation there must also be a settlement statement showing all name of the interested parties, their signatures, the date of purchase, price of the home and property address.

If the home being purchased is a mobile home, a sales contract from the retailer with the names and signatures of buyer and seller, the price, address where the mobile home is located and the date it was purchased must accompany Form 5405. If it is new construction, the certificate of occupancy from the city or county that shows the owner’s name, date of the certificate and the address of the property must be filed. The existing home buyer will have to show proof of living in their old home for five years in a row. The property tax records or homeowner’s insurance can be used for this proof.