Tax credit extension until April 2010

Below you will find information about the extension of the housing tax credit. The credit now last until April of 2010 and can be very helpful not only for first time home buyers but move up buyers as well. The tax credit has been a devisive issue in congress and there are many who think that it is not such a great idea. As for me, I don't have much of an opinion. As a Realtor it is obvious that it will generate some business for me and that is a good thing. However, I am worried that it will only serve to increase the growing national debt and encourage some to purchase homes who really have no business doing so. I am a big believer in home ownership and think that it is the best path for most Americans to financial security. However, events in the sub prime mortgage market in the past few years clearly demonstrate that that there are a lot of people who really should "not" buy homes.



$8,000 First-time Home Buyer Tax Credit at a Glance

The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.

The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

The tax credit applies only to homes priced at $800,000 or less.

The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.

For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.

The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
The tax credit applies only to homes priced at $800,000 or less.

The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.

Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.