Home Buyer Tax Credit Extended and Expanded:
The highly successful 2009 first-time home buyer tax that was set to expire has been extended for a second time. Plus, it is now available to people who currently own a home. There are a lot of myths about who qualifies for this tax credit, so here is a brief breakdown for you:
Important Date: May 1, 2010. This is the date the Purchase & Sale Contract (P&S) must be signed to be eligible and the transaction must close by July 1, 2010. Any purchase contract dated after May 1, 2010 will not be not eligible even if though it may close prior to July 1st because the contract was executed after the May 1, 2010 deadline.
First-Time Home Buyer: Tax Credit Amount = up to $8,000. How is this calculated? It is 10% of the home’s value or $8,000 whichever is less. So, any home over $80,000 will get a maximum tax credit of $8,000. What is a First-Time Home Buyer? It is anyone that has not previously owned a home or has not owned a primary residence within the last 36 months. Individuals that currently own second homes or vacation homes but have not lived in them for the past 36 months may still qualify.
Existing Home Buyer: Tax Credit Amount = up to $6,500. This is for current homeowners that have lived in their current home for at least 5 years. So, if you purchased your home 2 years ago you would not qualify.
Military Bonus: If you served in our military for more than 90 days outside of our boarders, you get a one-year extension and have until 2011.
Income Limits: The tax credit begins to phase out for a single person that makes more than $125,000. For married couples it phases out at $225,000.
Click on the following link for answers to Frequently Asked Questions concerning the Tax Credit: http://www.realtoractioncenter.com/realtor-party/documents/2009-NAR-FAQ-Tax-Credit-Changes-1105-1236.pdf