For Buyers

First-Time and Repeat Homebuyer Tax Credits

 

CLOSE ON A HOUSE BY JULY 1, 2010 AND

QUALIFY FOR CASH BACK FROM THE IRS

 

The first-time home buyer tax credit of up to $8,000 is still in place. The extension of time by Congress also includes a new credit of up to $6,500 for certain repeat home buyers.

 The first-time buyer credit is essentially the same of the original credit, which expired in November. The buyer can't have owned a home for three years, and the home can't be bought from a parent, grandparent, child or grandchild.

 Buyers can claim the credit on either 2008 or 2009 tax returns. If they don't owe enough tax to qualify for the $8,000 credit, they will receive a check from Internal Revenue Service for the amount between what they owe and $8,000 or for $8,000 if all taxes are already paid.

New provisions
 * For purchases made after November 6, 2009, no credit is available for any home costing more than $800,000.

 * Taxpayers who have lived in their homes for five consecutive years or more can quality for a tax credit of as much as 10 percent of the purchase price, or a maximum of $6,500. The new home doesn't have to cost more than the old one.

 * Income limits for buyers are more generous. For single filers, the credit phases out between $125,000 and $145,000 of modified adjusted gross income. For married couples, the range is $225,000 to $245,000.

 * Buyers must be 18 or older and can't be a dependent on someone else's tax return. And buyers must show proof of purchase to qualify for the credit.

 * The credit must be for purchase of a principle residence, which can be a house, condo, semi-attached townhouse, or (if it has eating, sleeping and toilet facilities) a boat, motor home or trailer.

 * Members of the military have an extra year to take advantage of these credits.

 Visit www.federalhousingtaxcredit.com for more information.

 

 
For more information about buying your first home, contact us by clicking Todd or Kara.  To learn more about saving money on other taxes related to owning a home, visit our Property Tax Alert page.

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