Home Buyer Tax Credit Extended and Expanded

For prospective Home Buyers this Thanksgiving heralded some exciting news. The 2009 Home Buyer Tax Credit has been extended and expanded.  The new Home Buyer’s Tax Credit will now not only apply to First Time Home Buyers, but to long standing home owners seeking to purchase a primary residence as well. As with any government incentive program, however, there are rules and regulations that apply. Here, in a nutshell, are the main features of the new program:

For Both ‘First Time Home Buyers’ and ‘Long Standing Home Owners’

• The tax credit is for 10% of the purchase price, up to the limits specified below.
•  The purchase price cannot exceed $800,000.
• A contract must be written and accepted between November 7, 2009 and May 1, 2010.
• Closing must occur before July 1, 2010.
• The tax credit only applies to primary residences, not second homes or investment properties.
• You must be at least 18 years old to qualify.

The following additonal  criteria and resrtrictionsalso apply:

First Time Home Buyers

•  
  • Maximum credit is $8000.
  •  Income limits of $75,000 for singles and $125,000 for married couples filing jointly.
  • A First time Home Buyer is someone who has not owned a home within the last three years.

Long-Standing Home Owner

•  
  • Maximum credit is $6,500.
  • Income limits of $125,000 for singles and $225,000 for married couples filing jointly.
  • A long-Standing Home Owner must have owned and lived in their previous home for five consecutive years out of the last eight years.

For Armed Services members who have been deployed on duty outside the United States, the tax credit has been extended to May 1, 2011 with a closing date before July 1, 2011. The Tax Credit is not repayable provided the buyer/s live in the home for at least 3 years.  If the property is sold during the three-year period, the credit will be recouped on the sale.

This information is NOT tax advise and should not be relied upon. It is provided for general information purposes only and clients and customers should always seek the advise of a qualified tax proffessional.