As you have probably already heard, our congress has extended the $8,000 tax credit for 1st time buyers out to April 30, 2010. That means the property will have to be under contract by that date, and closed by June 30, 2010. With the inventory of homes that is currently available, the low prices and the low interest rates, this is probably the best time you will ever see in your life to buy a home. That is, if you are qualified to purchase a home. There are some great loan programs out there, some are no money down with 106% financing, so call your lender of choice to see what they can do for you.

In addition to the 1st time buyer program, congress also created a program that allows current home owners who have lived in their primary residence for 3 of the last 5 years, to purchase another home and receive a $6,500 tax credit. This may not sound like much, but when you combine it with another program, it becomes huge for those buyers. There are, of course, certain limitations on these programs, and I encourage any one interested in them to talk to their accountant or tax advisor.

What program? Why the one that allows homeowners who have lived in their home for 2 of the last 5 years to sell their home tax free. Actually, a single owner is allowed a tax free profit of up to $250,000, and a couple is allowed up to $500,000. So people who are looking to upgrade or downsize can use the tax free profits from the sale of their existing home to purchase their new home, and then receive a $6,500 tax credit from the government.

Or, since the owner has to live in the home 2 out of 5 years in order to qualify for the tax free sale, there is a possibility that they could buy a new home now, move into it and claim the $6,500 tax credit, and then rent the older home out for 2 to 3 years, keeping in mind that it must be sold within the 3 years time frame in order to be a tax free sale.

Or the owners could then investigate the possibility of doing a 1031 exchange on the property, allowing them to purchase other investment properties with the profits from the sale, and postpone paying taxes indefinitely.

Please remember that all tax and legal issues should be discussed with professionals in those fields. It is strongly suggested that you meet with them before pursuing any of the possibilities that have been suggested here.

If you are thinking about purchasing or selling real estate in the Sebastian Florida or Vero Beach Florida areas, please look at our Indian River Home Sales web site. We look forward to hearing from you!