Time Is Running Out On First Time Buyer/HomeOwner Upgrade Tax Credits

By
Real Estate Agent with HomeSmart Realty West BRE #01786169

The Worker, Homeownership, and Business Assistance Act of 2009 has extended the federally-supported tax credit of up to $8,000 for qualified first-time homebuyers purchasing a principal residence. It also authorizes a tax credit of up to $6,500 for qualified repeat or move-up homebuyers.The new tax credit expires April 30, 2010 (buyers must be under contract by April 30, 2010, and close on or before June 30, 2010). That means homebuyers should act now. With an estimated cost of $10.8 billion over 10 years (estimated by the Joint Committee on Taxation), it is not likely that the credit will be extended beyond the existing deadline of April 30, 2010.

The tax credit, combined with low interest rates and affordable

home prices, makes this a great time to buy.

Higher income limits may allow more homebuyers to qualify. For sales occurring after November 6, 2009, income limits have increased from $75,000 to $125,000 for single taxpayers, and from $150,000 to $225,000 for married

taxpayers who file jointly.

The maximum eligible purchase price has increased. The new maximum of $800,000 allows more buyers to qualify. This new maximum purchase price limit applies to both first-time and repeat homebuyers.

The amount of the tax credit is different for first-time and repeat

homebuyers.

•First-time homebuyers may qualify for a credit of up to $8,000 (10% of the purchase price of the home or $8,000, whichever is

less).

•Repeat/move-up homebuyers may qualify for a credit of up to

$6,500 (10% of the purchase price of the home or $6,500, whichever is less).

No repayment is required. The tax credit does not have to be repaid as long as homebuyers use their new home as their principal residence for at least three years after the purchase.

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