Tax Credit Extension…Who Qualifies Now?
Saturday, February 6th, 2010Last year’s tax credit to First-Time Home Buyers was supposed to end on December 1, 2009. Congress elected to extend the credit in November to April 30, 2010. In addition, Congress added a new credit for those that would be considered Move-up or Repeat buyers.
To qualify for the the First-Time Buyer credit, the borrower must:
- Apply for the tax credit, it is a maximum of $8000 for a first-time buyer defined as someone that has not owned a home in the last 3 years,
- The credit does not have to be re-paid unless the home is sold or ceases to be used as the buyer’s principal residence within 3 years of the purchase date,
- In calculating the credit, it is equal to 10% of the purchase price up to a maximum of $8000 and the purchase price must be $800,000 or less,
- The tax credit now applies to purchases made on or after January 1, 2009 to April 30, 2010 and, if contracted on or before April 30, 2010, the purchase must close by June 30, 2010 to qualify.
For the Move-up or Repeat Home-buyer credit, the buyer must:
- Have owned and lived in their previous home for 5 consecutive years out of the last 8,
- The credit does not have to be re-paid unless the home is sold or ceases to be used as the buyer’s personal residence within 3 years of the purchase date,
- The tax credit is equal to 10% of the sales price up to a maximum of $6500 on the purchase of a home of $800,000 or less,
- The credit applies to homes purchased on or after November 6, 2009 and on or before April 30, 2010. If the contract is signed on or before April 30, 2010 the sale must close by June 30, 2010.