Extended Homebuyer Tax Credit Information.
So maybe you haven’t heard but Congress recently extended the homebuyers tax credit. That is great news for first time homebuyers and move up buyers alike! That is right the new tax credit also includes move up buyers who have lived in their current home for at least 5 of the last 8 years. There is other criteria that needs to be met that I will review below.
Overall this is great news for homebuyers, sellers and the entire real estate market. With low interest rates, great affordable home values and now the extension of the tax credit, it truly is a great time to buy!
The Extended Homebuyer Tax Credit
• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Who Qualifies for the Extended Credit?
• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight. To qualify as a “first-time home buyer” the purchaser or his/herspouse may not have owned a residence during the three yearsprior to the purchase.
Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000. The maximum allowable credit for current homeowners is $6,500.
How is a Buyer’s Credit Amount Determined?
Each home buyer’s tax credit is determined by two additional factors:
1. The price of the home.
2. The buyer’s income.
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.
Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
Information courtesy of the National Association Of Realtors.
I hope that you find this information helpful. If you have any questions, need more information about the tax credit or want to buy or sell your home please visit my website 24/7 or contact me. I am here to help
Walking With You Every Step Of The Way!
– Jenn Nowalk Raleigh REALTOR/Broker