Home Buyer Tax Credit
Home Buyer Tax Credit
It’s Official; the Home Buyer Tax Credit Has Been Extended & Expanded!
President Obama stated, “the rebound in the housing market was one of the big factors that contributed to the growth of the economy last quarter. We want to give even more families the chance to own their own home.” The decision was to not only extend the first time home buyer tax credit but to add another component which is a $6,500 credit for sellers.
Here are the details of the extended and expanded tax credit:
- The housing tax break for first time buyers, which was initially set to expire at the end of November, is now available to buyers who sign a contract by April 30, 2010, and close by June 30, 2010.
- In addition, other buyers who have lived in their current residence for at least five years of the last eight but want to relocate to a new primary residence can receive a credit of up to $6,500 - the incentive for these "move-up or move-down" buyers will begin on December 1st of this year.
- Income limits increased and are the same for first-time buyer and the existing homeowner - $125,000 for single filers/$225,000 for joint.
- The tax break is only available on primary residences priced at $800,000 or less.
- Time frame: December 1, 2009 to April 30, 2010 - plus 60-day extension if binding contract is in place by April 30, 2010. Must lock into a contract to close on home purchase by midnight on April 30, 2010. The closing must occur before midnight on June 30, 2010.
- As in the previous program, the tax credit applies only to the purchase of an individual's primary residence. The tax credit does not apply to second homes or investment properties.
The significant changes are that the tax credit has been extended, the income limits have been raised to cover more buyers AND now there is a credit available to sellers that have lived in their houses at least 5 of the last 8 years. Click here for detailed information from the IRS on the the ins and outs of the program.
