The 2009 first-time buyers' credit will add between 200,000 and 400,000 new sales that would not have taken place without the credit. Only 70 percent of existing buyers qualify for the new credit because of residency restrictions, according to a Goldman Sachs study, and many believe the only change in the first-time buyer credit, raising income limits, affects only 14 percent of first-timers and the extension of the credit will not motivate many others if they have not acted by now.
NJAR® anticipates that the newly signed legislation will help maintain the recent momentum seen in the New Jersey real estate market and spur the state's economy as a whole. The legislation will extend the $8,000 first-time home buyer tax credit past its original November 30 deadline, and it will now be available through April 30, 2010. Additionally, existing homeowners who have lived in their homes for at least five consecutive years out of the last eight will be eligible for a credit that can total $6,500. Other details of that amendment are as follows:
- Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
- Credit remains at $8,000 for first-time purchasers. No change to definition of first-time purchaser.
- Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.
- The purchase price of the property may not exceed $800,000.
- New anti-fraud limitations are imposed.
- If selling and buying and if you qualify for the tax credit, you need to be under contract no later than the end of April 2010 and close no later than June 30, 2009.