What You Need to Know About the Extended Home Buyer Tax Credit
The home buyer tax credit- which originally only applied to first time home buyers who had until the end of November to take advantage of the $8,000 tax credit- was recently extended to April 30, 2010 and expanded to include buyers who have already been homeowners.
While first time homebuyers who are purchasing a home- new or resale- are still eligible for the $8,000 tax credit, homeowners who have lived in their current home for at least five consecutive years within the last eight, and who want to purchase a different home, qualify for a different $6,500 tax credit.
To qualify for the $8,000 tax credit, first time home buyers must purchase a home on or after January 1, 2009 and on or before April 30, 2010. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. A limited exception exists for certain contract for deed purchases and installment sale purchases. See the IRS website for more detail. The law also allows home sales occurring by June 30, 2010 to qualify, provided they are due to a binding sales contract in force on or before April 30, 2010. The purchaser has until June 30, 2010 to close.
To qualify for the $6,500 tax credit, homeowners who are purchasing a new home must do so between November 7, 2009 and April 30, 2010, and they have until June 30, 2010 to close.
There are income limits for claiming the tax credit which are as follows:
For sales occurring after November 6, 2009, the income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $125,000 for single taxpayers and $225,000 for married taxpayers filing a joint return. The phase-out range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
For more information on the home buyer tax credit, visit FAQ: Am I Eligible for the Tax Credit?, posted on Move.com’s Home Finance section.
December 08 2009 04:09 pm | Real Estate News