While you’ve probably heard a lot in the media about the government’s efforts
to rejuvenate the housing market with the first-time home buyer tax credit, you
might have missed the fact that the most recent expansion of the legislation
also includes a $6,500 credit for current homeowners who want to purchase a new
home…commonly referred to as “moving up.”
As a Member of the Top 5 in Real Estate Network®, I’ve worked with many
homeowners who have wanted to move to a new home over the past year, but have
stayed put due to a lack of confidence in the market. Now, however, thanks to
the tax advantages of the Worker, Homeownership, and Business Assistance Act of
2009, these homeowners are moving off the sidelines and purchasing the homes
they’ve always wanted.
But the time to act is now—there is only a short window of opportunity! The
move-up buyer credit expires in April of 2010, which means you must contract
and close on your home purchase by June 30, 2010. As you know, selecting a home
is not a simple process, so start your search now so you don’t miss the
starters, here are the key facts you need to know about the move-up buyer tax
1. A qualified current homeowner who wishes to move
to a different home (a ‘move-up’ buyer) must have owned and resided in their
residence for five consecutive years out of the last eight. It’s not enough
that you have been homeowners for five years—you must have been in the same
home for five consecutive years.
2. Single taxpayers with incomes up to $125,000 and
married couples with a joint income up to $225,000 qualify for the full tax
credit. According to Goldman Sachs, these income limits make approximately 70%
of current homeowners eligible for the credit.
3. The maximum credit amount for current homeowners is $6,500. Under the new
legislation, a tax credit may only be issued for homes purchased for $800,000
4. Even though the term “move-up” is used to describe these buyers, the credit
is not predicated on buying a home of higher value than your current home.
5. Move-up buyers are not required to sell their current home to qualify for
the credit. They must reside in the new home for at least three years, but they
can keep their existing home and either leave it vacated or use it for rental
These are just a few of the key facts surrounding
the move-up buyer tax credit. If you would like to find out more, including
whether or not you are eligible for the credit, please leave me a comment! Be
sure to forward this to all your homeowner friends so they can take advantage
of this once-in-a-lifetime opportunity.