Extended Homebuyer Tax Credit 2009/2010 

President Obama has signed into law an extension on the first-time homebuyer tax credit.  The extension includes an expansion of the tax credit that now allows homebuyers who have owned a home for more than five years to get a tax credit when they buy a new home.

            First-Time Homebuyers 

•   To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
•    The first-time homebuyer tax credit is extended until April 30, 2010.
•  First-time homebuyers can qualify for a tax credit of up to $8,000 (10% of the sales price of the home).
•  First-time homebuyers must buy a home between November 7, 2009 and April 30, 2010.
•  The contract on the home must be written and in effect no later than April 30, 2010.  The contract must close before July 1, 2010; the last day to close will be June 30, 2010.
• Maximum allowable credit for first-time homebuyers is $8,000; the maximum sales price of the home is $800,000.
•  The tax credit applies to primary residences only: condominiums, town homes, single-family homes, and co-ops all qualify as long as the home will be the buyer’s primary residence.  Investment properties, second homes, vacation homes are not eligible.
• Single buyers with incomes up to $125,000 and married couples filing jointly with incomes up to $225,000 may receive the maximum tax credit. The credit decreases for single buyers with incomes between $125,000 and $145,000 and for married buyers filing jointly with incomes between $225,000 and $245,000.  Single buyers with incomes above $145,000 and married buyers filing jointly with incomes above $245,000 do not qualify for the tax credit.
•  If the buyer owns the home for at least three years after the closing date, the tax credit does not have to be repaid. If the property is sold during the three-year period the full amount of the tax credit will be recouped on the sale, e.g. taken out of the proceeds. 

            Current Homeowners

• Current homeowners who buy a home can qualify for a tax credit of up to $6,500 if they meet certain criteria.
• Current homeowners purchasing a home between November 7, 2009 and April 30, 2010 must have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
• The contract on the home must be written and in effect no later than April 30, 2010.  The contract must close before July 1, 2010; the last day to close will be June 30, 2010.
• Maximum sales price of the home is $800,000; homes with sales prices above that limit do not qualify for the tax credit.
• The tax credit applies to primary residences only: condominiums, town homes, single-family homes, and co-ops all qualify as long as the home will be the buyer’s primary residence.  Investment properties, second homes, vacation homes are not eligible.
• Single buyers with incomes up to $125,000 and married couples filing jointly with incomes up to $225,000 may receive the maximum tax credit. The credit decreases for single buyers with incomes between $125,000 and $145,000 and for married buyers filing jointly with incomes between $225,000 and $245,000.  Single buyers with incomes above $145,000 and married buyers filing jointly with incomes above $245,000 do not qualify for the tax credit.
• If the buyer owns the home for at least three years after the closing date, the tax credit does not have to be repaid. If the property is sold during the three-year period the full amount of the tax credit will be recouped on the sale, e.g. taken out of the proceeds.