The first time home buyers $8000 tax credit was extended on Nov. 6. While most requirements concerning the tax credit remained the same, some changes were made. All the changes will apply to those settling on their primary residence after Nov. 6.
1. Date Extended to April 30, 2010
The first time home buyers $8000 tax credit was extended to cover primary residences that settle by April 30, 2010. With the new law, if you have a primary residence under contract by April 30, 2010 then you can still qualify as long as you settle before July 1, 2010. First time home buyers are still defined as buyers who have not owned a home within the last three years.
2. A Tax Credit is Available for Current Home Owners
If you have lived in a primary residence consecutively for the last five out of the eight years, then you can qualify for a joint $6,500 tax credit or 10% of the purchase price whichever one is less if you are closing on your new primary residence between Nov. 6 and April 30, 2010. If you are married filing separately then the credit will be $3250. The new primary residence does not have to cost more than the primary residence you sold.
3. Income Limits were Increased
For purchases after Nov. 6, 2009, single home buyers can now make $125,000 a year and married buyers can make up to $225,000 to qualify for the tax credit. However, if you do exceed the income limits, you can still get a portion of the credit. The credit amount is reduced incrementally until it is phased out completely when the income limit is exceeded by $20,000.
4. Purchase Price can’t Exceed $800,00
The purchase price of the primary residence can not exceed $800,000. While this will not affect most first time home buyers it could affect those non first time home buyers who are moving up after selling their primary residence.
5. Age Requirement
You now have to be at least 18 years of age and not a dependent on someone else’s tax return for the year of the purchase to receive the tax credit.
6. Proof of Purchase
To reduce fraud, you now have to attach proof of purchase to your tax return in order to receive a credit. With the new tax credit extension and provision allowing existing homeowners to receive a tax credit, 2010 should be a great year for real estate on the Main Line and everywhere. Another extension is not likely to happen, so take advantage of this great opportunity while it lasts. How often does the government pay you to purchase a home?
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