Home Buyer Tax Credit
Government Home Buyer Tax Credit Program Extended and Expanded:
An extension of the $8,000 first-time homebuyer tax credit, which was slated to expire Nov. 30, 2009, was overwhelmingly approved and signed into law by President Obama in early November. This extension will be for contracts signed before May 1, 2010 that close before July 1, 2010. The new legislation also increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the current level.
Additionally, buyers who already own a home worth $800,000 or less are also now eligible for a tax credit and the purchase of a home. The $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 will take effect December 1, 2009 and is not retroactive.
Bottom line: with interest rates remaining at 50 year historic low levels, this is a great time to consider buying real estate, whether for first time home buyers or buyers who already own a home.
Program details are shown below.
Please feel free to contact me if you have further questions.
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Current |
New |
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Effective Date |
· January 1, 2009 |
· December 1, 2009 |
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Deadline |
· Close on or before |
· Contract signed before May 1, 2010, must close before July 1, 2010 · Members of the uniformed services, foreign services, and intelligence employees who served an extended service of 90 days will have until April 30, 2011 and June 30, 2011. |
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Amount |
· First-Timers: maximum of $8,000 or 10% of sales price · Prior Owners: $0 |
· First-Timers: Unchanged · Prior Owners: $6,500 if lived in prior home for at least 5 years of past 8 years |
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Income Limit |
· Individual: $75,000
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· Individual: $125,000
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Other Restrictions |
· Home must be primary residence for at least 3 years. If home is sold or buyer moves before 3 years, must re-pay full amount of credit. |
· Buyer must be at least 18 years old and not classified as a dependent for tax purposes · Home must cost less than $800,000
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How to claim |
· If purchased in 2009, by amending 2009 tax return or claiming on 2010 tax return |
· If purchased in 2010, by amending 2010 tax return or claiming on 2011 tax return |
