Below is a shorter recapped version of what we have been hearing about the first time home buyers tax credit.
Sen. Johnny Isakson's (R-Ga.) office forwarded some additional details of the $8,000 tax credit deal that Senate negotiators worked out last night: The tax credit would be $8,000 for first-time home buyers and $6,500 for move-up buyers.
The new tax credits will be available from December 1, 2009 to April 30, 2010. The tax credit will sunset on April 30, 2010, but as long as you have a binding contract by that date, you will still qualify to complete the transaction within 60 days. Move-up buyers are eligible, as long as the home they're leaving has been used as their principal residence for 5 years or more.
Income limits for both first-time home buyers and move-up buyers would be $125,000 for individuals and $225,000 for married couples. The home being purchased may not cost $800,000. (The tax credit is structured that you will get 10 percent of the purchase price up to $8,000 for first-time buyers and $6,500 for trade-up buyers, but if you're buying a $1 million house, you're ineligible to get a tax credit.) For purchases made in 2010, taxpayers can claim the tax credit on their 2009 income tax return. Home buyers would not have to repay the credit provided the home remains their principal residence for 36 months after the purchase date.
The amendment includes a military waiver provision, meaning the recapture provision would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on qualified official extended duty. In addition, members of the military who have been deployed overseas for 90 days or more in 2008 or 2009 would have until April 30, 2011 to claim the home buyer tax credit.
The amendment also includes anti-fraud language that gives authority to the IRS to do greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires the taxpayer claiming the credit to be 18 years of age or older (no more 4-year olds filing for the tax credit), as well as requiring a HUD-1 settlement statement to be attached when claiming the credit.