Finally! A Tax Credit for Santa Clara County Move-Up Buyers

Finally! A Tax Credit for Santa Clara County Move-Up Buyers

By Michelle C. Carr-Crowe

While most media stories have focused on the extension of the existing tax credit for first-time buyers, originally set to expire at the end of the month, the bigger story is the new tax credit for existing homeowners. This news is especially welcome in high-priced Santa Clara County.

In addition to continuing the $8,000 tax credit to first-time buyers, it provides a new $6,500 tax break to qualified homeowners looking to move up to middle-market homes that cost no more than $800,000.

With this revision, the government has made incentive benefits available to a much larger group of potential home buyers, including homeowners in condos, townhomes, and smaller single-family homes, who've put off transitioning upwards.

For example, a young family with a 2 bedroom condo in West San Jose worth $400,000 seeking to buy a single family home in Cupertino for $650,000 is essentially getting a tax credit worth 1 percent of the new home's purchase price. Also, they've made another property available for first-time homebuyers in Silicon Valley's desirable, (but rapidly diminishing) under $500,000 category.

The new measure allows both first-timers and existing homeowners to take advantage of thousands in the form of a tax credit. All properties must close by the end of April, a scant five months away, during what is traditionally the season of lowest inventory for the year.

The legislation also significantly raises the qualifying income levels to $125,000 for individual income tax filers and to $225,000 for joint filers.

Additionally, the bill extends unemployment benefits 14 more weeks nationwide and 20 more weeks in California and other hard-hit states.

Reprinted with permission from the National Association of REALTORS®.