Lehigh Valley Association of REALTORS
Homebuyer Tax Credit Information
SUMMARY:
On votes of 98- 0 and 403 - 12, the Senate and House have respectively passed legislation that includes an extension and expansion of the homebuyer tax credit. President Obama signed the legislation on Friday, November 6. Many parts of it take effect immediately. As of the signing of the legislation, the income limits increase to $125,000 adjusted gross income on a single return and $225,000 on a joint return. In addition, the so-called "move-up" credit is also in effect as of November 6. Thus, individuals who have used a home as a principal residence for 5 consecutive years of the past 8 years will be eligible for a $6500 refundable tax credit for purchases completed between November 6, 2009 and April 30, 2010.
FREQUENTLY ASKED QUESTIONS:
Who Qualifies for the Extended Credit?1. First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010. To qualify as a "first-time home buyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. 2. Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight. Please note that it is not a "Seller Credit." Sellers do not simply get the credit if they sell their home during this time period. They must purchase a home within the time period to receive the credit. Which Properties Are Eligible?The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops. How Much Is Available?The maximum allowable credit for first-time home buyers is $8,000.The maximum allowable credit for current homeowners is $6,500. How is a Buyer's Credit Amount Determined?Each home buyer's tax credit is determined by two additional factors:1. The price of the home. Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less. 2. The buyer's income. Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000-may receive the maximum tax credit. If the Buyer(s)' Income Exceeds These Limits, Can He/She Still Get a Credit?Yes, some buyers may still be eligible for the credit. The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income-over $145,000 for singles and over $245,000 for couples are not eligible for the credit. Can a Buyer Still Qualify If He/She Closes After April 30, 2010?Yes. Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close. Will the Tax Credit Need to Be Repaid?No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale. For more info contact me at: findit@LehighValleyRealty.com
