A home for the holidays

Grant Chesshir

The Signal Staff

There is great cause for celebration this holiday season, and it doesn’t have a thing to do with a heavy-set cookie bandit in a red velvet suit. First-time homebuyers rejoice as new legislation lends them a much needed helping hand.

President Obama signed legislation Nov. 6 that extended and expanded the Housing and Economic Recovery Act of 2008. These changes affect the eligibility of prospective purchasers and also extend the deadline of the credit by five months.

“It’s had a dramatic effect already,” says Megan Booth, senior policy representative for the National Association of Realtors. “We are already starting to see a rebound.”

The new legislation, the Worker, Homeownership, and Business Assistance Act of 2009, offers up to an $8,000 tax credit for first-time homebuyers and up to a $6,500 tax credit to current homeowners. Under this new legislation, a first-time buyer will be eligible for the tax credit so long as a home purchase —new or resale — is made on or after

Jan. 1, 2009 and on or before April 30, 2010. The government Web site www.irs.gov defines a first-time buyer as someone who has not owned a principle residence in the three years prior to purchase. The tax credit is 10 percent of the purchase price of the home, up to $8000, and is does not have to be paid back unless the home ceases to be the buyer’s primary residency within three years of purchase.

Under the previous legislation the income limits were $75,000 for those filing single tax returns and $150,000 for those filing as married. The new act extends the eligibility to $125,000 for those filing single and up to $225,000 for those filing as married. The new act also includes a cost limitation on a purchased home of $800,000. A homebuyer wishing to purchase a home exceeding the limiting cost will not qualify for the tax credit.

This new act also affects those who already own a home but are looking to upgrade. In order to qualify for the “move–up” of up to $6,500 you must have owned and used the same house as your primary residence for five of the eight years prior to purchasing the home.

The Homeownership, and Business Assistance Act of 2009 is a “great opportunity for people that have been waiting to purchase a home to do so,” said  Lea Crusberg, IRS spokesperson.