Homebuyer Tax Credit - As modified in the American Recovery and Reinvestment Act of 2009
(Major Modifications in Italic)
The following information highlights the differences between the 2008 and the 2009 Housing Tax Credit...
|
Feature |
Credit as Created July '08 - Applies to all Qualified Purchases on or After April 9th, 2008 |
Revised Credit - Effective for Purchases on or After January 1st, 2009 & on or Before November 30th, 2009 |
|
Amount of Credit |
Lesser of 10% of cost of home or $7,500 |
Maximum credit amount increased to $8,000 |
|
Eligible Property |
Any single family residence (including condos, co-ops) townhouses that will be used as a principal residence. |
No change All principal residences eligible. |
|
Refundable |
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser. |
No change Purchasers will continue to receive refund for unused amount when tax return is filed. |
|
Income Limit |
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000). |
No change Same income limits continue to apply. |
|
Qualifications |
Purchasers (and purchaser's spouse) may not have owned a principal residence in three (3) years previous to purchase. |
No change Still available to First Time Homebuyers or those who have not owned a principal residence in the three (3) years prior to purchase. |
|
Revenue Bond Financing |
No credit allowed is home is financed with state/local bond funding. |
Purchasers who utilize revenue bond financing can use credit. |
|
Repayment |
Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing. |
No repayment for purchases on or after January 1st, 2009 and on or before November 30th, 2009. |
|
Recapture |
If home sold before 15-year repayment period ends, then outstanding balance or repayment amount recaptured on sale. |
If home is sold within three (3) years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009. |
|
Termination |
July 1st, 2009 (But note program changes for 2009) |
On November 30th, 2009. |
|
Effective Date |
Purchases on or after April 9th, 2008 and before January 1st, 2009. Repayment to begin for 2010 tax year. |
All revisions are retroactive to January 1st, 2009. |
Source: National Association of REALTORS®
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