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Real Estate Reinvented 
Buyer Rebates Real Estate Perfection:
When you use REMAXREBATE Buyer?s Max Rebate Program for your real estate purchases, you are ahead of the game before you even get to the negotiating table.
So for example if you use our Buyer?s Max Rebate Program to purchase a $600,000 property and the buyer?s agent commission is 3%, you can receive $12,000 directly from escrow upon closing of escrow.
If you use our Buyer?s Full Service Rebate Program to purchase a property in the above scenario, you can receive $9,000 directly from escrow upon closing of escrow.
The above rebates are REMAXREBATE rebates and are independent from any government tax credit and/or home builders discounts. Thus a buyer may qualify for multiple programs.
HOMEBUYER |
FEDERAL |
CALIFORNIA |
| Amount of Tax Credit | 10% of purchase price not to exceed $8,000 for First-Time Homebuyers or $6,500 for Long-Term Residents. | 5% of purchase price, not to exceed $10,000 for first-time homebuyers or buyers of properties that have never been occupied. (See also Maximum Credit for All Taxpayers.) |
| Date of Purchase | By June 30, 2010, but taxpayer must enter into a written binding contract by April 30, 2010. | From May 1, 2010 to July 31, 2011, but an enforceable contract must be executed by December 31, 2010. |
| Principal Residence | Yes. Property purchased must be the taxpayer’s principal residence which is generally the home the taxpayer lives in most of the time (26 U.S.C. § 121). | Yes. Property purchased must be a qualified principal residence and eligible for the homeowner’s exemption from property taxes (Cal. Tax & Rev. Code § 218). |
| Type of Property | House, condominium, townhome, manufactured home, apartment cooperative, houseboat, housetrailer, or other type of property located in the U.S. | Single-family residence, whether detached or attached. |
| Eligibility | 1. First-Time Homebuyer: Up to $8,000 if buyer (and buyer’s spouse if any) has not owned a principal residence during the three-year period before date of purchase; OR 2. Long-Time Resident: Up to $6,500 if buyer (and buyer’s spouse if any) has owned and used existing home as a principal residence for 5 of the last 8 years. |
1. First-Time Homebuyer: Up to $10,000 if the buyer (or buyer’s spouse if any) has not owned a principal residence during the three-year period before date of purchase; OR 2. Never-Occupied Property: Up to $10,000 for a principal residence if the property has never been previously occupied as certified by the seller. |
| Income Restriction | Yes. Tax credit begins to phase out for modified adjusted gross income (MAGI) over $125,000 (or $225,000 for joint filers). No tax credit at all for MAGI over $145,000 (or $245,000 for joint filers). | NO |
| Maximum Purchase Price | $800,000. | N/A |
| Refundable | Yes. Any amount of the tax credit not used to reduce the tax owed may be added to the taxpayer’s tax refund check. | NO |
| Repayment | No repayment required if the buyer owns and occupies the property for at least 36 months after purchase. | No repayment required if the buyer owns and occupies the property for at least two years immediately following the purchase. |
| Multiple Buyers (not married to each other) |
Tax credit may be allocated between eligible taxpayers in any reasonable manner. | Tax credit must be allocated between eligible taxpayers based on their percentage of ownership. |
| Maximum Credit for All Taxpayers | N/A | $100 million for first-time homebuyers and $100 million for never-occupied properties, both on a first-come-first-served basis. |
| Reservations of Credit | N/A | Yes. Buyer may reserve credit before close of escrow for a property that has never been occupied by submitting a certification signed by buyer and seller stating they have entered into an enforceable contract between May 1, 2010 and December 31, 2010, inclusive. |
| When to Claim | Full tax credit may be claimed on 2009 or 2010 tax returns. | 1/3 of total tax credit may be claimed each year for 3 successive years (e.g. $3,333 for 2010, $3,333 for 2011, and $3,333 for 2012). |
| Tax Agency | Internal Revenue Service (IRS). | Franchise Tax Board (FTB). |
| How to File | First-Time Homebuyer Credit and Repayment of the Credit (IR S Form 5405) to be filed with tax returns | To Be Announced. The FTB may prescribe rules and procedures to carry out this law. |
| Other Restrictions | Cannot be an acquisition from related persons as defined; cannot be an acquisition by gift or inheritance; and buyer cannot be a non resident alien. | Cannot be an acquisition from related persons as defined; buyer or spouse must be 18 years old; buyer cannot be another taxpayer’s dependent; credit is allowed for only one qualified principal residence; and credit allowed cannot be a business credit under Cal. Tax & Rev. Code § 17039.2. |
| Legal Authority | 26 U.S.C. section 36. | Cal. Rev. & Tax Code section 17059.1 (as added by Assembly Bill 183). |
| Date of Enactment | November 6, 2009 (as revised). | March 25, 2010. |
| More Information | IRS Web site at http://www.irs.gov/newsroom/article/0,,id= 204671,00.html. |
FTB Web site at http://www.ftb.ca.gov/ individuals/ New_Home_Credit.shtml. |
$8,000 First-time Home Buyer Tax Credit at a Glance
The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer?s principal residence within three years after the initial purchase.
The tax credit is equal to 10 percent of the home?s purchase price up to a maximum of $8,000.
The tax credit applies only to homes priced at $800,000 or less.
The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance
To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer?s principal residence within three years after the initial purchase.
The tax credit is equal to 10 percent of the home?s purchase price up to a maximum of $6,500.
The tax credit applies only to homes priced at $800,000 or less.
The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
When Can A Buyer Pay Seller Expenses?
As short sales have become a regular process of the real estate industry the many aspects involved are currently changing government underwriting guidelines for buyers. Until recently, regional FHA offices would furnish conflicting views of opinion to FHA Washington D.C. as to what is customary in a transaction. FHA, FNMA and FHLMC are evaluating all types of scenarios for formal guidance to furnish lenders. Until which time final guidelines are published the following is a review of the guidance lenders have received so far.
Transactions involving borrowers paying seller?s costs are required to be approved on an exception basis until the formal guidelines are finished. Buyers may pay additional fees/payments that would typically be the responsibility of the seller or another party to the transaction. These would include short sales fees, payments to a 2nd lien holder and repairs. To be considered for approval, the following is required to be adhered to:
The buyer must:
• Be provided with written details of these additional fees/payments as soon as they are known;
• Have written details of the additional fees/payments fully disclosed in the purchase agreement;
• Have the option of terminating the purchase contract;
• Have the necessary documented funds to complete the transaction including the additional fees/payments; and
• Any reimbursement of these fees/payments by the seller or any other interested party will considered a sales concession.
The lender, agreeing to the pre-foreclosure/short sale, must:
• Be provided with written details of these additional fees/payments as soon as they are known;
• Have the option of renegotiating the payoff amount that they will accept to release the first lien; and
• Provide their written agreement of the final details of the transaction.
There are additional factors for the approval which involves the loan to value, buyer?s credit, ratios and reserves as well as property type and occupancy.