Ten things to know as time runs out on the Homebuyer Tax Credit. Anyone hoping to participate in the $6,500 to $8,000 homebuyer tax credit has only until April 30th (11 days) to sign a binding contract. Vicki Cox Golder, National Association of Realtors President, thinks it is highly unlikely that Congress will extend the homebuyer tax credit for a third time. The first thing a homebuyer must do is get pre-approved for a loan. Most offers to purchase these days must include a pre-approval from a lender before the seller will even look at an offer. Here are ten other things to know:
1. You must enter into a contract on a principal residence on or before April 30th. Once you have a signed and agreed upon contract, you must also close on the home before June 30th.
2. The credit that you are allowed is 10 percent of the home's purchase price, up to $8,000 for first-time buyers, and $6,500 for current homeowners that are purchasing a new primary residence.
3. To qualify for the first-time homebuyer tax credit (up to $8,000 tax credit), you (and your spouse if married) must not have jointly or separately owned another principal residence for three years prior to the purchase.
4. In order to qualify for a resident homebuyer ( up to $6,500 tax credit), you (and your spouse if married) must have lived in the same primary residence for five consecutive years out of the last eight years. You must have purchased a new primary residence after November 6, 2009. If you are married, you and your spouse must have owned and used the same principal residence.
5. The tax credit does not have to be repaid if you remain in the home for three years. If you sell this primary residence within 36 months, the full credit must be repaid on that year's tax return.
6. For homes purchased after November 6, 2009, single taxpayers must have a modified adjusted gross income of $125,000 or less, and married couples filing jointly must make $225,000 or less. The credit is reduced for single taxpayers who earn up to $145,000 and couples who make up to $245,000. Any taxpayer with a higher income does not qualify.
7. An existing homebuyers' new principal residence must not cost more than $800,000. Existing homebuyers do not have to sell their former principal residence to get the credit.
8. You can qualify for the tax credit with a new-construction contract. However, homebuyers must close and occupy the new construction home by June 30.
9. Homes purchased from a direct relative, includes spouse, parent, grandparent, child or grandchild, are not eligibe for the tax credit.
10. For homes purchased in 2010, homebuyers can claim the credit on their 2009 or 2010 tax return.
Time is running short, but there is still time for the saavy buyer to get the Homebuyer Tax Credit.