In an effort to continue pushing the nation’s economy along the road to recovery, President Obama recently signed a bill that extends the first-time home buyer tax credit and expands the credit to include more buyers.
Previously, the $8,000 first time home buyers tax credit was set to expire on November 30, 2009 but has now been extended, uninterrupted through April 30, 2010. A second credit of up to $6,500 has been added allowing existing homeowners to “move-up” and take advantage of the incentive.
EXTENDED: First-time buyers who have not owned a home in the past three years are eligible for up to an $8,000 tax credit.
- Tax credit does not require repayment.
- Credit is available to couples with gross income of less than $225,000 and individuals making less than $125,000. Previously, the limit was $75,000 for individuals and $150,000 for couples.
- Buyers must secure a binding contract by April 30, allowing 60 days to close. Previously, the sale had to closed by the expiration date, now the purchase must be under contract by the expiration date and closed by June 30, 2010.
EXPANDED: Qualified homeowners who have lived in their current home for at least five of the past eight years are eligible for up to a $6,500 tax credit to buy a home, effective as of November 7, 2009.
- Tax credit does not require repayment.
- Credit is available to couples with gross income of less than $225,000 and individuals making less than $125,000.
- Credit is limited to homes priced $800,000 or less.
- Buyers must secure a binding contract by April 30, allowing 60 days to close.
The National Association of Realtors put together this chart outlining the tax credit changes. To download the PDF file, click on the image:
For more information about the tax credit, please consult with your Realtor, loan officer and/or tax advisor.
Related references:
Federal Housing Tax Credit website (lots of info, FAQs)
IRS – First Time Homebuyer Tax Credit
NAR – Tax credit basics
