Note: This is intended to provide an overview only – for specific information or individual concerns, please contact your lawyer, accountant and/or financial advisor.
The federal income tax credit for homebuyers has been extended and expanded to now include homeowners who wish to “move on” after 5 years of living in their current property, as well as first-time homebuyers.
- First-time homebuyers, or those who have not owned in the last three years, can receive up to an $8,000 tax credit
- Homeowners who have lived in a current home consecutively for 5 of the past 8 years can receive up to a $6,500 tax credit
- There may be no future extensions, so all qualified homebuyers are urged to act and have a written, binding contract by April 30, 2010 (close by June 30, 2010)
- Income limits are now $125,000 for singles, $225,000 for married couples
According to The National Association of Realtors News Release, dated 11/5/09, the original bill has been credited with helping approximately 2 million people to date, adding an estimated $22 billion to the general economy.
The following chart provides more information:
|Feature||For First-Time Homebuyers||For Current Qualifying Homeowners|
|Amount of Credit||$8,000 ($4,000) married filing separate)||$6,500 ($3,250 married filing separate)|
|Eligibility||May not have had an interest in a principal residence for 3 years prior to purchase||Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years|
|Termination of Credit||Purchases after April 30, 2010||Purchases after April 30, 2010|
|Binding Contract Rule||N/A||So 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||$125,000 – Single$225,000 – MarriedAdditional $20,000 Phase Out||$125,000 – Single$225,000 – MarriedAdditional $20,000 Phase Out|
|Limitation on Cost of Home Purchased||$800,000||$800,000|
|Second Home Purchase||N/A||Ineligible|
|Purchase Made by a Dependent||Ineligible||Ineligible|
|Additional Requirements||Purchaser must attach documentation of purchase to tax return||Purchaser must attach documentation of purchase to tax return|
Murray Balkcom, GRI, Realtor
SoWal’s Real Estate Guru
Coldwell Banker United, Realtors — Seagrove, FL