Income Tax Credit for First-Time Homebuyers Extended
The federal income tax credit for homebuyers has been extended and expanded to now include homeowners who wish to “move on ” after 5 years of living in their current property, as well as first-time homebuyers.
- First-time homebuyers, or those who have not owned in the last three years, can receive up to an $8,000 tax credit
- Homeowners who have lived in a current home consecutively for 5 of the past 8 years can receive up to a $6,500 tax credit
- There will be no future extensions, so all qualified homebuyers are urged to act and have a written, binding contract by April 30, 2010 (close by July 1, 2010)
- Income limits are now $125,000 for singles, $225,000 for married couples
The original bill has been credited with helping approximately 2 million people to date, adding an estimated $22 billion to the general economy.
The following chart provides more information:
|
FEATURE |
FOR FIRST-TIME HOMEBUYERS |
FOR CURRENT QUALIFYING HOMEOWNERS |
|
Amount of Credit |
$8,000 ($4,000 married filing separate) |
$6,500 ($3,250 married filing separate) |
|
Eligibility |
May not have had an interest in a principal residence for 3 years prior to purchase |
Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years |
|
Termination of Credit |
Purchases after April 30, 2010 |
Purchases after April 30, 2010 |
|
Binding Contract Rule |
N/A |
So 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 |
|
Income Limits |
$125,000 – Single $225,000 – Married Additional $20,000 Phase Out |
$125,000 – Single $225,000 – Married Additional $20,000 Phase Out |
|
LImitation on Cost of Home Purchased |
$800,000 |
$800,000 |
|
Second Home Purchase |
N/A |
Ineligible |
|
Purchase Made by a Dependent |
Ineligible |
Ineligible |
|
Additional Requirements |
Purchaser must attach documentation of purchase to tax return |
Purchaser must attach documentation of purchase to tax return |
Information courtesy of http://www.realtor.org and http://www.whitehouse.gov
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