The new tax credit extends the First-Time Home Buyer Tax Credit of up to $8,000.
The new tax credit expands the credit to those who currently own a home. The grant is up to $6,500.
Both of these credits are for those purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Who Qualifies for the Extended Credit?
- First-time home buyers (those who have never purchased a home or who have not owned their principal residence in the last 3 years) who purchase homes between November 7, 2009 and April 30, 2010.
- Current home owners 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 within the last eight.
What Type of Properties Are Eligible?The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How is a Buyer’s Credit Amount Determined?Each individual home buyer’s tax credit is determined by two factors:
- The price of the home.
- The buyer’s income.
Under the Extended Home Buyer Tax Credit, the credit is for an amount up to 10% of the purchase price of the house so it can only be awarded on homes purchased for $800,000 or less.
Under the Extended Home Buyer Tax Credit, which went into effect on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
Can the Buyer Still Qualify If The Closing Is After April 30, 2010?Under the Extended Home Buyer Tax Credit, as long as a written, binding contract is in effect on, or before, April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?No. The buyer does not need to repay this tax credit, if the home is occupied by the buyer for three years or more after purchase. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.