Philadelphia Real Estate Tax Credits For Home Buyers
By Larry Flick, Prudential Fox & Roach, Realtors
How Home Buyers Can Take Advantage of the Tax Credit and ‘Move Up’
While you’ve probably heard a lot in the media about the government’s efforts to rejuvenate the real estate 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.”
“Our firm has dealt 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,” says Larry Flick, CEO, of Prudential Fox & Roach serving Philadelphia Metro Area and . “Thanks to the tax advantages of the Worker, Homeownership, and Business Assistance Act of 2009, however, now is the time for homeowners to move off the sidelines and pursue the home they’ve always wanted. There may never be an opportunity quite like this again.”
According to Flick, 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. Since selecting a home is not a simple process, so start your search now so you don’t miss the deadline
Here are the key points Flick says to be aware of regarding the move-up buyer tax credit:
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 or less.
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 purposes.
Blog post compliments of CenterCityTeam’s Philadelphia Real Estate Blog
Frank L. DeFazio, Esquire
Prudential Fox & Roach Realtors – Society Hill
530 Walnut Street, Suite 260
Philadelphia, PA 19106