This will help the Spring market get off to a faster start, and it could cause some fence sitting home owners to make the plunge and start looking for a new bigger home, which meets their current needs.
Here are the details of the New Home Buyers Tax Credit:

• The credit is for 10% of the purchase price up to a maximum of $8,000 for first time home buyers and up to $6,500 for qualified move up buyers. This means that if you are a first time home buyer and your purchase is $80,000 or more, the credit will be $8,000.
• The credit is good for properties that are under contract by April 30th and you have until the end of June to get the financing together and close.
• It is now available for first time home buyers (a first time home buyer is anyone who hasn’t owned a home in the last 3 years) and move up buyers who have lived in their home for 5 consecutive years out of the last 8.
• The home has to be for your primary residence. Second homes and investment properties don’t qualify.
• This is a true tax credit. As long as you stay in the home at least 3 years, the credit is yours to keep. If you sell before 3 years is up, you may need to pay the credit back.
• If your tax liability is less than the $8,000 credit ($6,500 for move up buyers), you will get the difference as a check back to you. If you have already filed your taxes, you can file an amended tax return in order to take the tax credit in the current year and get the money back quicker.
• Income caps apply. They have increased the income caps so more home buyers will now qualify. A single buyer qualifies as long as they earn up to $125,000 per year, and couples are maxed out at $225,000 per year. Higher earning borrowers may get a partial credit, but the amount decreases as their income rises.

  To take advantage of the credit borrowers will need to file an IRS 5405 form along with their HUD1 closing statement showing that they have closed on the home.

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