Tax Credit Expanded and Extended 2009/2010

With the signing of the Extended Home Buyer Tax Credit, existing homeowners may now qualify for a $6500 Tax Credit.  This new legislation is time sensitive and unfortunately does not apply to all existing homeowners.  Here are the important points to know:

• Who qualifies – current homeowners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years with the last eight years qualify. 
• Time Limits – as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until June 30, 201o to close. 
• Income Limits – single buyers with income up to $125,000 and married couples with income up to $225,000 may receive the maximum tax credit.  The credit decreases for buyers who earn between $125,000 and $145,000 for a single buyer and between $225,000 and $245,000 for home buyers filing jointly. 
• Price Limits – credit may only be awarded to homes purchased for $800,000 or less.
• Repayment of Tax Credit – there is no repayment of the tax credit if the purchased property is occupied for three years or more.  However, if the property is sold during this three-year period, the full amount will be recouped on the sale.

Now you know the facts.  What does in mean…

• You receive the $6500 Tax Credit by purchasing a home.  You are not required to sell your current home – just make the new home your principle residence for 3 years.
• You can purchase a property for a higer value or lower value than your present residence. 
• You must act now…April 30 is the deadline.
• Upon closing the new home purchase you can file an amended tax return for an immediate $6500 Tax Credit.

Important to remember…

• The present low prices and mortgage rates will not last forever!
• Here is an opportunity to “move” to your dream home…something smaller, something larger, something one level, whatever is your dream.

Signing of the legislation also extended the First Time Buyer Tax Credit.  The credit continues to be up to $8000 with a few changes.

• Time Limit – as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until June 30, 2010 to close.
• Income Limits – single buyers with income up to $125,000 and married couples with income up to $225,000 receive the maximum tax credit.  The credit decreases for buyers who earn between $125,000 to $145,000 for single buyers and between $225,000 to $245,000 for home buyers filing jointly
• Repayment of  Tax Credit – if the purchaser resides in the home for 3 years or more there in no repayment penalty.  If the purchaser sales the property before 3 years, the tax credit will be recouped at that time