There are only 87 Days left to get a home under contract in order to qualify for the First Time Homebuyer's Tax credit and the expanded $6,500 for Move-up buyers.
Last December, the First Time Home Buyers Tax Credit was extended and expanded. Previously, the First Time Home Buyers Tax Credit was only available for first time home buyers (those buyers who had not owned a home in the three years previous to the current purchase) and was only available on homes that closed escrow before December 1, 2009.
However, President Obama signed an extension on this deadline to apply to any homes purchased from November 6, 2009 to May 1, 2010 and allowed all homes that have a binding sales contract signed by April 30, 2010 to qualify for the up to $8000 tax credit (based on purchase price of home), not just those homes that closed escrow. In addition to the extension, existing homeowners may be eligible for up to a $6500 tax credit providing that they have used their current home as their primary residence for at least five consecutive years of the last eight years, meet the income requirements and are purchasing a new primary residence. Vacation homes and income properties don't apply.
Requirements and Limits:
1. First time homebuyers who haven't owned a primary residence in the last three years. Existing homeowners who have used their current home as their primary residence for at least five consecutive years of the last eight years.
2. For single or head-of-household tax filers, the limit for their modified adjusted gross income is less than $125,000. For married couples who file a joint return, the limit is less than $225,000.
3. For consideration of partial tax credit, single or head-of-household tax filers can earn between $125,000-$145,000. Married couples filing jointly who make between $225,000-$245,000 may also be eligible for a partial tax credit.
4. Purchase price of home must be less than $800,000 to qualify and must be the home buyer's primary residence.
5. Tax credit is considered refundable, meaning that if you owe less than the credit amount you qualify for, you will receive a tax refund for the difference of what you owe and the tax credit you are eligible for. For example, if you are eligible for the full $8000 refund and you owe $5000 in taxes, you will receive a refund check for $3000 ($8000 tax credit minus the $5000 you owe).
6. You must make the home you purchased your primary residence for three consecutive years to keep the entire tax credit. If you sell the property or stop using it as your primary residence within three years of purchase, you will have to repay the tax credit back to the government.
Remember that the amount of tax credit you are eligible for depends on the purchase price of the home. So, the tax credit you actually receive may be less than the limit. Also, the tax credit is only available on homes used for the home buyers' primary residence, not to any income or vacation property.
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