Time’s Up For Homebuyer Tax Credit

April 28, 2010

Time is running out for home buyers to take advantage of thousands of dollars in federal tax credits for purchasing a home.

homecredit.jpgThe $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home buyers expire Friday. However, service members who were on official extended duty outside of the United States for at least 90 days between Jan.1, 2009 and May 1, 2010, may qualify for a one-year extension.

If a binding sales contract is signed by April 30, 2010, home buyers have until June 30, 2010 to complete the purchase.

For more information, visit the National Association of Home Builders at federalhousingtaxcredit.com.

$8,000 First-time Home Buyer Tax Credit at a Glance

  • The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
  • The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
  • The tax credit applies only to homes priced at $800,000 or less.
  • The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
  • For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
  • For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

  • To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
  • The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
  • The tax credit applies only to homes priced at $800,000 or less.
  • The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
  • Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Source: National Association of Home Builders

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Written by William Reynolds · Filed Under FEATURE TOP STORY, Features, News