Buying

Homebuyer Tax Credit Extension

Now Is The Time To Buy

The $8,000 homebuyer tax credit for first-time buyers has been extended through April 30 of next year. In addition, buyers will have an additional two months, until the end of June, to close. So, first-time buyers who are in process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. It also increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in previous law.

The new legislation also makes buyers who already own a home eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.

First Time Homebuyer Tax Credit Information


Amount of Credit
Ten percent of the value of home or $8,000, whichever is less. For existing homeowners it’s $6,500.

Refundable
No “repayment” required, unless home is sold within the first three years.

Eligible Property
Any owner occupied, single-family residence (including condos, co-ops) that will be used as a principal residence. The purchase price of the home is capped at $800,000 in both instances.

Who’s Eligible?
First time homebuyers as defined below and existing homeowners who have lived in their current residence for five of the prior eight years.

Definition of First Time Homebuyer
A buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

Income Limit
Full credit is available for individuals with modified adjusted gross of no more than $125,000 ($225,000 on a joint return).

Deadline
April 30, 2010 to be under contract. June 30, 2010 to close transaction.