The latest on home buyer tax credits
The first-time home buyer tax credit was recently extended. This credit remains at 10 percent of the purchase price up to a maximum credit of $8,000. To qualify, you must buy the home as your principal residence and not have owned a home in the previous three years. There is also a provision for people who already own a home and purchase a new one. The credit for repeat buyers is 10 percent of the purchase price, with a maximum credit of $6,500. To qualify, you must have owned and lived in a home as your primary residence for five consecutive years at any time during the eight years before the replacement home is purchased. The following rules apply to both credit, for first-time and repeat buyers:
- You must live in the newly purchased home for at least 36 months or you will have to repay the entire credit, with certain exceptions for military personnel or people who die.
- You must sign a binding contract to purchase by April 30, 2010 and close by June 30.
- You may buy a new or existing home.
- The price cannot exceed $800,000. Under the old law, there was no price limit. Date of purchase is the day title changes hands.
- New, higher income limits apply. New limits, which apply to both first-time and repeat buyers are $125,000 to $145,000 for singles and $225,000 to $245,000 for joint filers.
See your tax advisor for more information on qualifying and rules regarding receipt of the credit |
