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Homebuyer Tax Credit - Vermont First-Time and Repeat Buyers

By Teresa DeLuca Merelman

Real Estate Agent with Pall Spera Company Realtors 081.0004547

November 15, 2009 12:49 PM

HOMEBUYER TAX CREDIT - First Time and Repeat Homebuyers

Home Buyer Tax Credit On November 9, 2009, President Barack Obama approved the first-time homebuyer tax credit extension. The extension is part of a $24 billion economic stimulus bill that extends the $8,000 tax credit for new homebuyers and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least 5 years and are seeking to relocate to a new home.

FIRST TIME HOME BUYER TAX CREDIT:

Who is Eligible? - First-time homebuyers - people who have not owned a home within the last 3 years - may be eligible. The credit is 10% of the purchase price of the home with a maximum available credit of $8,000.
All U.S. citizens who file taxes are eligible to participate.

Income Limits:
Single or Head-of-Household may claim the full credit if their modified adjusted gross income is less than $125,000.
Married couple filing a joint return - the combined income limit is $225,000.
Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couple who earn between $225,000 and $245,000 are eligible to receive a partial credit.
Single taxpayers whose modified adjusted gross income is greater than $145,000 and married couple with gross imcome greater that $245,000 are not eligible for the credit.

Types of Homes that Qualify:
All homes with a purchase price of less than $800,000 qualify - including newly constructed or resale, and single-family homes, townhomes or condominiums. The home must be used as a Principal Residence. Vacation home and rental properties do not qualify.

Effective Dates:
The homes must be purchased after November 6, 2009 and before May 1, 2010. Home purchases subject to a sales contract signed by April 20, 2010 will also qualify provided the closing occurs before July 1, 2010.

Tax Credit:
The tax credit is a direct reduction of tax liability owed to the IRS. If no taxes are owed, the IRS will isue a check in the amount of the tax credit. The credit does not require repayment unless the home, at any time in the first 3 years of ownership, is no longer the individual's primary residence.

EXISTING HOMEOWNERS

Existing homeowners who have been residing their principal residence for 5 consecutive years out of the last eight are eligible. They must purchase a home to be their principal residence. They may be eligble for up to a $6,5000 tax credit.
The Income Limits are the same as the First Time Home Buyer.
The home purchased must also be less than $800,000. The home purchase does not have to be priced higher that the home sold.

RESTRICTIONS:

A credit will not be due if:
- The home is purchased from a close relative (spouse, parent, child, etc.)
- The home is not used as principal residence.
- The Purchaser is a nonresident alien.

New Anti-Fraud Rule - In an effort to prevent Faud - the purchaser must attach documentation of purchase to the tax return.

Additional Information:

There is a wealth of information out on the internet. I have come up with the following sites that appear to offer legitimate information about the Tax Credit. Be certain to check with your tax attorney or accountant for additional details about the program and your ability to qualify within the specific timelines, purchase price, and income qualifications.

NAR - Chart RE: Homebuyer Tax Credit