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Homebuyer Tax Credit Extended and Expanded
(11/14/09)

Congress has extended the First Time Buyer Tax Credit, and the good news for home buyers is: It’s no longer limited to first time buyers. The program was scheduled to expire on December 1, but has now been extended to include contracts written before April 30 and which will close by June 30, 2010.

There are also changes in the income limits: Single purchasers can now earn as much as $125,000 and married couples can earn up to $225,000 and still qualify for the full credit. While the amount of the credit for first time buyers remains at the original $8,000, the extension has been modified and offers an incentive of up to $6,500 to move up buyers who have owned their principal residence for at least 5 consecutive years out of the prior eight years.

To qualify for these tax credits buyers must sign a sales contract between December 1, 2009 and April 30, 2010, and must close the home by June 30, 2010. Similar to the first tax credit, this one is refundable, which means if your tax bill is less than the amount of the credit, the IRS will refund the difference.

Additionally, age requirements were added into this bill: Buyers must be at least 18 years of age by the date of closing; and in the case of married couples, one spouse must be at least 18 years of age.

The maximum sales price of qualified homes is $800,000.

There are also special exemptions and extensions of dates for members of the armed forces.

As always check with your tax advisor for advice on your specific circumstances. You may also wish to visit the NAHB website for additional information.