Extended and Expanded Tax Credit
The previous $8000 tax credit for first time home buyers expired on November 30th, 2009. For those that had not already put in a contract on a house, Congress extended and expanded the first time home buyer tax credit into 2010. First, find your home knowing that President Obama signed The Worker, Homeownership, and Business Assistance Act of 2009 bill into law on November 6, 2009. The first time home buyer tax credit extension allows a buyer to enter into a contract with a seller by April 30, 2010 and close on the house by June 30, 2010.
The law defines “first-time home buyer” as a buyer who has not owned a
principal residence during the three-year period prior to the purchase. For
married taxpayers, the law tests the homeownership history of both the home
buyer and his/her spouse. First time home buyers will get an $8,000 tax credit,
similar to the tax credit for much of 2009. Income limitations have been
increased to $125,000 for single filers and $225,000 for joint filers. The purchase
price of the home must be less than $800,000.
The bill also made more homeowners eligible to claim the credit on their taxes.
The law has established a tax credit of up to $6,500 for qualified move-up/repeat
home buyers (existing home owners) purchasing a principal residence after
November 6, 2009 and on or before June 30, 2010 (with a binding sales contract
signed by April 30, 2010). The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. For married
taxpayers, the law tests the homeownership history of both the home buyer and
his/her spouse. Repeat home buyers do not have to purchase a home that is
more expensive than their previous home to qualify for the tax credit.
Here are some of the details:
• First-time buyers (those who have not owned a home for three years) can
continue to claim an $8,000 credit.
• Home buyers who have owned their current homes for at least 5 years are
eligible for tax credits of up to $6,500.
• The credit is equal to ten percent of the purchase price of a primary
residence, up to a maximum of $8,000 for first-time buyers and $6,500 for
move-up/repeat home buyers.
• The credit is available for homes that go under contract by April 30, 2010
and close by June 30,2010.
• Income limits: $125,000 a year for individuals, $225,000 a year for married
couples (higher limits than before).
• The home buyer tax credit is available for the purchase of "principal
homes" (vacation homes are ineligible).
• Homes that cost more than $800,000 are not eligible for the credit.
• You must be 18 years old to claim the credit.
• The deadline is extended by a year for those who have served outside the
United States for at least 90 days from Jan. 1, 2009 to May 1, 2010.
Here are some examples
• Joseph owned a home in 2001 and 2002 but sold it. He would qualify for the
$8,000 first-time-buyer credit because he has not owned a home in the past
three years.
• Mary purchased a home in 2004 and has lived there since. If she buys a new
home, she would qualify for the $6,500 tax credit because she has lived in the
same residence for five consecutive years in the past eight.
• Sue purchased her home in 2002, lived there for five consecutive years before
she rented it out in 2007. She would qualify because she was an owner/occupier
for at least five consecutive years in the past eight.
• Sam purchased a home in 2006 and lived there for the past three years. He
would not qualify because he is neither a first-time homebuyer nor someone who
lived in the same primary residence for five consecutive years out of the past
eight.
Taxpayers can claim the credit on their federal tax returns. If the credit
exceeds the tax bill, the government will issue a payment. Come on buyers…if you have even considered buying a home, NOW is the time! For home buyers you have some great incentives, home prices are low…. interest rates are unbelievable… and you get a tax credit..
So, what are you waiting for… if you missed out the first time , the tax credit
extension will only be here until April 30th .
An Marshall, REALTOR
Prudential Network Realty
Extremely Full Service
www.AnMarshallOnTheMove.com
view my blog
email:an.marshall@prudentialnetworkrealty.com
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