This month the Senate extended the 1st Time Home Buyer Tax Credit that began January 1st of 2009. Initially it was set to end on November 30, 2009. However, President Obama signed the extension on November 6th. This tax credit has also been expanded to “Move Up Buyers” who currently own a home and are interested in moving up in home price. It’s a great incentive considering interest rates are still in the 5% range on most home loans.
$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.
There’s a lot of information to consider when making a move, please feel free to call or email me if you have questions regarding the new changes to the tax credit.
I’m here to help!
