Heather Morris Realtor Expert for Cedar Rapids, Marion, Hiawatha & Robins

           The extension of the tax credit for first time home buyers and new legislation for current homeowners passed on November 6, 2009 will stimulate the Cedar Rapids, Marion, Robins, and surrounding community real estate markets.  It is important for you to understand the qualifications, benefits, and concerns regarding whether you qualify for the tax credit before writing a purchase contract.

            First time home buyers (defined as not owning real estate for the last three years) with an income of less then $125,000 qualify for the maximum tax credit of 10% of the purchase price or $8,000.  A partial credit is available for the first time buyer with an income $125,000 to $144,999.  Single tax file returns with income $145,000 do not have any benefits.  For joint returns, the maximum credit will be provided if less then $225,000 is earned, partial up to $244,999 in income and no benefits with income over $245,000. 

            The existing home owner tax credit is for current owners owning a primary residence that was occupied 5 consecutive years out of the last 8 year period.  The new house does not have to cost more then the old house.  The tax credit for current owners is $6,500.

            The maximum purchase price that qualifies is $800,000.  This is over four times the median home price in Linn, Johnson, and Benton County creating an incredible opportunity for move up buyers.  Low fixed interest rates create a winning equation for both home buyers and sellers.  All offers must have a purchase contract date of April 30, 2010 or sooner with a closing date of July 1, 2010 or sooner. 

            A key change to the 2008 tax credit is that there is not a repayment penalty unless the house is not owner occupied during the first three years of ownership or sold.  Another modification to the tax credit is seller financing for contract home sales where the seller holds the title.  The IRS has identified 7 qualifications for contract sales available on their web site or you may seek a tax professional.

            Verifying your eligibility by seeking a tax professional is important.  Blood relative sales, non-resident alien sales, non-owner occupied sales are a few conditions that void eligibility.  For a market conditions report of home sales and a buyer counseling interview, seek a professional Realtor.

Heather Morris CRS, GRI, ABR, CLHMS

Broker Associate/ Skogman Realty