Final Details on Tax Credit
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In case you live in a cave and didn’t hear, the Government extended the tax credit for first time buyers to the end of April 2010. It also expanded the program to include up to $6,500 in tax credits for buyers looking to move up or down. The biggest rule to follow if you are a repeat buyer, is you must have lived in your home for 5 consecutive years (out of the last 8).
The National Association of Home Builders has done a great job of breaking out these credit since it was first created. So, rather than put it in my own words, let’s just look at what they wrote. This information can be found at www.federalhousingtaxcredit.com.
$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.
