The homebuyer tax credit has officially been extended.  President Obama has approved the first-time homebuyer tax credit extension, which will last through April 30, 2010.  And, there is a $6,500 credit to repeat buyers who have lived in their current home for at least five years and are looking to relocate.

The new extension is part of a $24 billion economic stimulus bill which will continue to give an $8,000 tax credit to homebuyers purchasing their first home and now $6,500 to repeat buyers who just want to relocate.

These tax credit expansion details apply:

Who is Eligible for the Tax Credit

* First-time homebuyers are eligible for up to an $8,000 tax credit.  A first-time homebuyer is defined as a buyer who has not owned a principal residence for at least three years prior to the purchase of the property.

* Repeat buyers are eligible for up to a $6,500 tax credit.  These homeowners are existing homeowners who have lived in their principal residence for at least five consecutive years. 

Income Limits that Apply to the Tax Credit

There are income limits that apply to those who are eligible for the tax credit. 

* Single or head of household single filing taxpayers can claim the full $8,000 credit for first-time buyers or $6,500 credit for repeat buyers as long as their gross income is less than $125,000 annually.

* For married couples who file a joint return, their combined income is limited to $225,000.

* Single or head of household taxpayers who earn between $125,000 and $225,000 are eligible for a partial credit.

* Any single taxpayer whose income exceeds $145,000 or any married couples whose income exceeds $245,000 is not eligible for the tax credit.

Tax Credit Effective Dates

Eligible homes must be purchased between November 6, 2009 and May 1, 2010.  However, the sales contract must be signed before April 30, 2010 to qualify for the tax credit and the property must close on before July 1, 2010.

Properties that Qualify for the Tax Credit

* Single-family

* Townhomes

* Condominiums

* Vacation and rental properties do not qualify.

Payback Provisions of the Tax Credit

There's good news here.  You never have to pay back the tax credit.  It is a true credit and does not have to be repaid unless the homeowner sells the property within three years of the purchase. That's the only catch.  Live in the home for three years and keep the tax credit forever.

Your Sound Choice in Amarillo Real Estate - Realtor® Tom Kile

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