Those thinking about buying a home right now are in unchartered territory.  Never before has the government offered such an incentive to buy a residence.  Yes, the first-time home buyer program offering $8,000 has been extended, but there was a new addition, $6,500 for home buyers who have previously owned a home.  This is unprecedented and I fully expect it to make a sizable impact to our local real estate market.  The tax credit provides an extra incentive for homeowners who were thinking of either moving to a more expensive home or downsizing but were previously sitting on the sidelines.  

The full $6,500 refundable tax credit is available if you meet the basic criteria:

• You have lived in a home that you own for at least 5 of the last 8 years.
• Execution of a purchase agreement by April 30, 2010 and closing by June 30, 2010.
• Earn less than $225,000 as a couple jointly or $125,000 individually.  The amount of the tax credit decreases as the homeowner’s income approaches the maximum limit of $145,000 for individuals or $245,000 for couples. 
• The purchase price of the home is less than $800,000.

A significant number of home owners will be able to capitalize on either the $8,000 or the $6,500 tax credit and these homebuyers will not need to repay the tax credit if they occupy the home for longer than 3 years.  Since the home values in Carmel are less than many other areas of the country, we will likely benefit more from these tax credits than elsewhere.  Increased homes sales will drive more people pumping money into the local economy. 

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