$8,000 First-Time Home Buyer and $6,500 Move-Up Buyer Tax Credit 2009-2010

Enacted on November 7, 2009 – the $8,000 tax credit has been extended and expanded, and has added an additional $6,500 tax-credit for “move-up buyers.” Below is a synopsis of the new regulations:

First-Time Buyers

• $8,000 Tax Credit
• Must not have owned a principal residence for any part of the past 3 years
• Income Restrictions:
  • Single: $125,000
  • Married: $225,000
  • For those who have incomes exceeding these, there will be a phase out or partial tax credit up to $20,000 above these limits
• Maximum Sales Price: $800,000
• Must have a ratified contract as of April 30, 2010, and close on or before June 30, 2010

Move-Up Buyers

• $6,500 Tax Credit
• Must have lived in the home sold or used it as primary residence consecutively for 5 of the previous 8 years
• Income Restrictions
  • Single: $125,000
  • Married: $225,000
  • For those who have incomes exceeding these, there will be a phase out or partial tax credit up to $20,000 above these limits
• Maximum Sales Price: $800,000
• Must have a ratified contract as of April 30, 2010, and close on or before June 30, 2010

I think, personally, this may cause a stir in some parts of the country, but I fear some “move-up buyers” may price themselves out of qualifying in the DC Metro area. I wish I had a crystal ball, but we’ll have to see what the market tells us to measure how much activity this causes.

The National Association of Realtors(R) has prepared this handy chart with the information above.