Tax Credit for First-Time Homebuyers
1. The extension moves the original deadline of November 30, 2009 forward to June 30, 2010. However a sales contract must be signed by April 30, 2010, and that property must be closed on by or on June 30.
2. The $8,000 tax credit for first-time homebuyers is unchanged other than the deadline. The tax credit allows up to $8,000 in the form of a tax rebate when the buyers file their 2009 taxes this coming spring. I say up to $8,000 because the tax credit is actually for the lesser of two amounts – 10 percent of the home purchase price or $8,000. This means if the property is purchased for less than $80,000, the tax credit will not be for the full $8,000.
Tax Credit for Current Homeowners (NEW!)
1. The homeowner must have lived in the same primary residence for at least five of the past eight years (five years must be consecutive).
2. Current homeowners who close on a new primary residence will receive a $6,500 tax credit if they sign a sales contract by April 30, 2010 and close by June 30, 2010 (same deadlines) on a new primary residence.
3. The new primary residence does not have to be more expensive than the current home to qualify.
4. All common purchases qualify – new construction, existing homes, condos, townhomes, etc.
5. The $6,500 tax credit is not retroactive and only includes homes purchased between November 6, 2009 and June 30, 2010.
Other General Information
1. Income limits have been raised for both new and current homeowners. Individuals can now make up to $125,000/year to qualify, and couples can make up to $225,000 to qualify.
2. The home cannot be more than $800,000 to qualify for the tax credit.
3. Individuals/couples who take advantage of either the $8,000 or $6,500 tax credit must live in the new primary residence for at least three years before moving or selling again. If the primary residence is sold within three years, the tax credit is recaptured entirely by the IRS.
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