Tax Credit for Homebuyers

By
Industry Observer with BeYoutiful HS KY License #68778

 

A Great Deal in Real Estate is Now Better
Note: This is intended to provide an overview only – for specific information or individual concerns, please contact your lawyer, accountant and/or financial advisor. Information courtesy of http://www.realtor.organd ://www.whitehouse.gov and Coldwell Banker.

The federal income tax credit for homebuyers has been extended and expanded to now include homeowners who wish to “move on” after 5 years of living in their current property, as well as first-time homebuyers.

 

  • First-time homebuyers, or those who have not owned in the last three years, can receive up to an $8,000 tax credit
  • Homeowners who have lived in a current home consecutively for 5 of the past 8 years can receive up to a $6,500 tax credit
  • There may be no future extensions, so all qualified homebuyers are urged to act and have a written, binding contract by April 30, 2010 (close by June 30, 2010)
  • Income limits are now $125,000 for singles, $225,000 for married couples with a $20,000 phase-out of the credit for both.

 

According to The National Association of Realtors News Release, dated 11/5/09, an estimated $22 billion has already been added to the general economy resulting from the bill and approximately 2 million people will utilize the tax credit in 2009.

The following chart provides more information:

Feature

For First-Time Homebuyers

For Current Qualifying Homeowners

Amount of Credit

$8,000 ($4,000) married filing separate)

$6,500 ($3,250 married filing separate)

Eligibility

May not have had an interest in a principal residence for 3 years prior to purchase

Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years

Termination of Credit

Purchases after April 30, 2010

Purchases after April 30, 2010

Binding Contract Rule

So long as a written binding contract to purchase is in effect on April 30, 2010 the purchaser will have until June 30, 2010 to close

So long as a written binding contract to purchase is in effect on April 30, 2010 the purchaser will have until June 30, 2010 to close

Income Limits

$125,000 – Single

$225,000 – Married

Additional $20,000 Phase Out

$125,000 – Single

$225,000 – Married

Additional $20,000 Phase Out

Limitation on Cost of Home Purchased

$800,000

$800,000

 

Purchase Made by a Dependent

 

 

Ineligible

 

Ineligible

 

Additional Requirements

Purchaser must attach documentation of purchase to tax return

Purchaser must attach documentation of purchase to tax return

   

 

Tax Credit for Homebuyers

Posted by

Thea Byrnes

 

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