New Tax Credit for Current Home Owners: Great News for Charleston, SC!

Although most of the real estate news seems to focus on the First Time Home Buyer Tax Credit, there has also been a new tax credit that will be signed in that is geared to help existing home owners.  The goal behind this bill is to encourage potential buyers who already own a home and have maintained (or paid in full) their mortgage bills steadily for at least five years.  These buyers would usually be moving up, or buying a larger or more expensive home.  The strong buyers’ market that is in most real estate markets around the country (including Charleston) is already encouraging current home owners to move up, since the percentage lost in the sale of the smaller home would be more than made up in the percent of savings in the larger home.  However, this new tax credit provides another major saving to these home owners. 

I have included below eligibility details for the $6,500 Move–Up/Repeat Home Buyer Tax Credit:

1)  Buyers must have owned and lived in their previous home (in other words, as a primary residence) for five years in a row out of the last eight years.

2)  The amount is 10 percent of the home’s purchase price, with a maximum credit of $6,500.

3)  The purchase price of the home must be $800,000 or less.

4)  The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, if a binding sales contract is signed by April 30, 2010, the home purchase qualifies (as long as the closing is completed by June 30, 2010).

5)  The income for a single taxpayer cannot exceed $125,000.  Married couples filing jointly must not have a combined income of more than $225,000.

Even if you don’t qualify for one of these credits yourself, you might know family members, friends, and coworkers that can benefit from these tax savings - and your knowledge could help someone you care about save money on their next home purchase!

As Realtors in Charleston, SC, we’ve seen the benefits of the First Time Home Buyer credit in our market.  It’s been a great incentive for getting buyers off the fence, so to speak, and getting homes sold in Charleston.  With the extension of the First Time credit and this new tax credit for current home owners, we’re expecting to see even more homes circulating on and off the Charleston real estate market!