First Home Buyer Incentives

Homebuyer Tax Credit has been extended and expanded!

FEATURE

FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT:

EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE APRIL 30, 2010

Amount of Credit

First-time home buyers and move up buyers have another great reason to get on the path to purchasing a new home! The benefit to First-time homebuyers is a tax credit up to $8,000 and for qualified Move-up buyers a tax credit up to $6,500. But this opportunity ends in April.

Dates of Eligibility

 Between November 7, 2009 and April 30, 2010, homebuyers that have a signed binding contract to purchase a home by April 30, 2010 may be eligible for the tax credit. The transaction must close by June 30, 2010.

First-Time Homebuyers

 For First-Time Homebuyers, a tax credit up to $8,000 ($4000 for married filing separate), homebuyers may receive a credit of 10 percent of the purchase price up to the $8,000 tax credit amount. If you have never owned a home before or have not owned a principle residence in the last three years, you are considered a First-Time Homebuyer.
  • 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.

Move-Up Buyers

 For the "Move Up" consumer, a tax credit of up to $6,500 ($3250 married filing separate) is available for Homeowners who have lived in their current residence for at least five consecutive years out of the past eight years. The homebuyers can receive a credit up to $6,500 when they contract to purchase a home by April 30, 2010, and close by June 30, 2010
  • 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.
  • Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Repayment

 The tax credit does not have to be repaid provided you live in the new home for a minimum of three years. Military families who must move due to a call to active duty are exempt from this minimum.

* This is intended to provide an overview only - for specific information or individual concerns, please contact your lawyer, accountant and/or financial advisor.

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