Just a few months ago, we posted an entry about keeping an eye on the ticking clock heralding the fast approaching deadline for the “original” First-Time Home Buyer Tax Credit. But, on November 6, 2009, the Worker, Homeownership, and Business Assistance Act, or Public Law 111-92, was enacted, extending the deadline and expanding the tax credit to include repeat home buyers.
With the excitement of the holiday season behind us, we thought it would be a good time to take another look at a few highlights of the new Home Buyer Tax Credit.
If you’re a buyer, take note of two important dates: to qualify for the new credit, you must have a binding sales contract in place by April 30, 2010, and the home purchase must be completed by June 30, 2010.
For first-time home buyers:
- A tax credit of up to $8,000 is available for first-time home buyers.
- A “first-time home buyer” is a buyer who has not owned a principal residence during the three-year period prior to the purchase.
- To receive the full credit, the income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
- You cannot purchase a home from, among other family members, your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members.
- Purchases of homes priced above $800,000 are not eligible for the tax credit.
For repeat buyers:
- A tax credit of up to $6,500 is available for repeat buyers.
- A repeat home buyer (“long-time resident”) is a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date.
- To receive the full credit, the income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
- You cannot purchase a home from, among other family members, your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members.
- Purchases of homes priced above $800,000 are not eligible for the tax credit.
For a comprehensive list of Frequently Asked Questions about the income limits, how to claim the credit and how the credit applies to new construction homes, visit www.federalhousingtaxcredit.com.
