A Great Deal in Real Estate is Now Better


The federal income tax credit for homebuyers has been extended and expanded to now include homeowners who wish to "move on" after 5 years of living in their current property, as well as first-time homebuyers.

 

  • First-time homebuyers, or those who have not owned in the last three years, can receive up to an $8,000 tax credit
  • Homeowners who have lived in a current home consecutively for 5 of the past 8 years can receive up to a $6,500 tax credit
  • There may be no future extensions, so all qualified homebuyers are urged to act and have a written, binding contract by April 30, 2010 (close by June 30, 2010)
  • Income limits are now $125,000 for singles, $225,000 for married couples with a $20,000 phase-out of the credit for both.

 

The following chart provides more information:

Feature
For First-Time Homebuyers
 For Current Qualifying Homeowners
Amount of Credit
$8,000 ($4,000) married filing separate)
$6,500 ($3,250 married filing separate)
Eligibility
May not have had an interest in a principal residence for 3 years prior to purchase
Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years
Termination of Credit
Purchases after April 30, 2010
Purchases after April 30, 2010
Binding Contract Rule
So long as a written binding contract to purchase is in effect on April 30, 2010 the purchaser will have until June 30, 2010 to close
So long as a written binding contract to purchase is in effect on April 30, 2010 the purchaser will have until June 30, 2010 to close
Income Limits
$125,000 - Single
$225,000 - Married
Additional $20,000 Phase Out
$125,000 - Single
$225,000 - Married
Additional $20,000 Phase Out
Limitation on Cost of Home Purchased
$800,000
$800,000
Purchase Made by a Dependent
 
Ineligible
 
Ineligible
 
Additional Requirements
Purchaser must attach documentation of purchase to tax return
Purchaser must attach documentation of purchase to tax return
 
 

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