On November 7, 2009 the $8,000 tax credit was extended and expanded. The new tax credit is good through April 30, 2010.
The new tax credit:
1) 10% of purchase price with maximum $8,000 – in other words, homes below $80,000 get 10% tax credit, and all homes above $80,000 and below $800,000 get $8,000 tax credit for first time homebuyers
2) There is a limitation on cost of the purchased home – tax credit applies only to principal residences up to $800,000
3) There is no tax credit for homes above $800,000
4) Expires April 30, 2010
5) First time home buyers did not own a home in the last 3 years prior to purchase/closing day
6) Other home buyers who are current homeowners qualify for a tax credit equal to 10% of the purchase price up to $6,500 if they used the home sold as a principal residence consecutively for 5 of the previous 8 years
7) The purchasers have until July 1, 2010, IF a written binding contract to purchase is in effect on April 30, 2010
8*) Income limits increased and are as follows:
$125,000 – Single purchaser
$225,000 – Married purchasers
9) Tax credit is a direct reduction of tax liability, not just taxable income and does NOT need to be repaid
10) The tax credit CAN be monetized for closing costs expenses, and downpayment above the required 3.5%, if borrowers use FHA-insured mortgage
11) Purchasers must attach documentation of purchase to tax return to claim credit
12) Cannot purchase a home from a close relative: spouse, parent, sibling, child, grandparents
13) Step-relatives qualify – Homes purchased from not direct blood relatives do qualify
14) If parents co-sign the mortgage and child qualifes – the child can claim the credit
15) Cannot claim a tax credit on a home purchased by a Dependent
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$8,000 tax credit for first-time home buyers
$6,500 tax credit for trade-up home buyers
6,5000
NOTE: For additional details contact lender, tax advisor, or an attorney.
