**Update: According to the National Association of REALTORS (R) , the answer to the main question below is YES, buyers settling houses after November 6, 2009, even if under contract before the bill was signed, would qualify for the credit. I still recommend speaking with your tax accounting professional to determine your eligibility and to be certain on the dates. I am not a tax accountant or an attorney, and am reporting on information given to the public by NAR, not providing legal advice.**
This afternoon, President Obama signed the tax credit extension bill, making way for more homebuyers to take advantage of an unusual opportunity — to get money back on their taxes AND buy a home!
There are still some questions out there that I have been getting conflicting answers on.
The $8,000 tax credit for first time homebuyers is much the same as it has been all of 2009, except for the income limitations.
According to the National Association of REALTORS(R) in a great explanation of the bill ,
“Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.”
The new bill includes a provision and $6,500 credit for current homeowners who are buying a new residence, provided they have lived in their current home for the last five consecutive years out of the last eight.
NAR reports the rules as:
“Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.”
The main question I keep receiving and I have also been asking is, if a homeowner qualifies for the credit in all ways, but is ALREADY UNDER CONTRACT on their new home, are they eligible? The bill says PURCHASING a home. Is that from date of SETTLEMENT or CONTRACT?
The law is very clear for the first time homebuyer side, but is muddy here.
CNN explains it as well as possible too. Again, no mention of this situation.
My best advice to anyone would be to contact your tax accountant to find out their best answer to this question. Hopefully it will be cleared up quickly.