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Details of the Homebuyer Tax Credit Extension

By
Real Estate Agent with Prominent Properties Sotheby's International Realty

Great News Everyone,

Last week, President Obama signed into law the Unemployment Compensation Extension Act that includes, as an amendment, the extension and expansion of the Homebuyer Tax Credit.

Who is Eligible: The bill provides a new incentive for existing homeowners who have owned their current homes at least five years, making them eligible for a tax credit of $6,500 when they purchase a new home. The bill also extends the incentive for first time homebuyers (defined as anyone who hasn’t owned a home in the last three years). Those buyers will continue to get an $8,000 tax credit.

Income Limits: The credit is available only for the purchase of principal homes costing $800,000 or less. Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income is less than $125,000. For married couples filing jointly, the combined income limit is $225,000. Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

Deadlines: To qualify, buyers must sign a purchase agreement by April 30, 2010 and close by June 30, 2010.

The tax credit is refundable, meaning that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference. For example, if a first-time buyer who qualifies for the full $8,000 credit owes $5,000 in federal income taxes – he/she would pay nothing to the IRS and receive a $3,000 payment from the government. The tax credit does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

Keep in mind that this is likely to be the last tax credit that the government will offer to first time and move-up buyers. The window of time is shorter than it may seem, especially for potential buyers who need to list and sell their existing homes. Read more here: http://newsletter.rismedia.com/newsletters/preview/2028/59729/851081

Posted by

 

Caroline Gosselin

Realtor / Sales Associate

Prominent Properties Sotheby's International Realty 

200 North Ave East, Westfield, NJ | Cell: 973 985-6117 | Off: 908-654-6666

 www.GosselinHomes.com and www.ProminentProperties.com

Caroline@gosselinhomes.com

  

Sheldon Neal
Bergen County, NJ - RE/MAX Real Estate Limited - Maywood, NJ
That British Agent Bergen County NJ

Nice summary Caroline !

Cheers :o)

Jan 15, 2010 01:32 PM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Caroline, Sheldon's right - good job! 

Jan 19, 2010 11:38 AM