$8,000 Tax Credit

Highlights for the 1st time home buyer credit of up to $8,000 extension

$8,000 credit, $4,000 credit if married and filing separate

May not have owned a principal residence in the past 3 years

Must purchase by April 30, 2010

Must close by July 1, 2010 (must have binding contract by April 30, 2010

Income limits increased: Single up to $125,000 annual income; $225,000 married couple combined annual income

To help prevent fraud, must attach documentation of purchase to tax return

Limitation of cost of home $800,000

Highlights for current homebuyer who owns, or have owned a home over the past 8 years and sells to buy a another home

$6,500 Tax Credit, not $,8000 and $3,250 if married filing separate

Must have used the home they have sold or are selling for 5 of the 8 previous years as the principal residence

Limitation of cost of home $800,000

Must purchase by April 30, 2010

Must close by July 1, 2010 (must have binding contract by April 30, 2010)

Here are the details from the National Association of REALTORS Action Committee

Consult your tax advisor!

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Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Who Qualifies?

First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

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.

Which Properties Are Eligible?

Primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?

The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by price and income:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If My Income Exceeds These Limits Can I Still Get Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for single buyers who earn between $75,000 and $95,000 and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?

No. providing you occupy the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.