Changes and Addition to the Federal Real Estate Tax Credit

Posted on November 13th, 2009 in All Articles, Market Conditions.

On November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers through June 30, 2010. The bill ALSO opens up opportunities for others who are not buying a home for the first time.

WHO QUALIFIES FOR THE CREDIT?

First-Time Homebuyers: People who have not owned a home within the last three years may be eligible for the tax credit.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary
residence for a period of five consecutive years during the last eight years.

WHAT ARE THE NEW DEADLINES?
In order to qualify for the credit, all contracts need to be in effect no later than April 30,2010 and close no later than June 30, 2010.

WHAT IS THE MAXIMUM PURCHASE PRICE?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.

WHAT ARE THE NEW INCOME CAPS?
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.