The $8,000 First Time Home Buyer Tax Credit & $6,500 Tax Credit- The Facts

Hooray! The tax credit has been extended to April 30, 2010! Great news to those who were holding off. A cool addition came along with the extension…and it includes homeowners. Homeowners who have been living in there home 5 out of the past 8 years will qualify for a $6,500 tax credit up to April 30, 2010. Below I have broken it down..

$8,000 First Time Home Buyer Tax Credit Info

A tax credit of up to $8,000 is available for first-time home buyers purchasing on or after January 1, 2009 and on or before April 30, 2010.You must have a contract written up, agreed upon, signed, and excepted by both parties on or before April 30, 2010. The home MUST close BY June 30, 2010. This will give you plenty of time to obtain a mortgage, negotiate through home inspection issues, and close on your home.

A First time home buyer is classified as a home buyer that has NEVER bought before or a home buyer that has not purchased or owned a home in the last 3 years
Income limits for the tax credit are $125,000 for individuals and $225,000 for married couples filing jointly
Married couples are not eligible to claim the first-time home buyer tax credit if either spouse has previously owned a home in the last 3 years. Meaning both people on the deed need to be first time home buyers
The tax credit does NOT need to be repaid
Folks who are claimed as dependents by a taxpayer or who are under age 18 do not qualify for a tax credit
Homes that are priced above 800,000 do not qualify for the tax credit
The tax credit is equal up to 10% of the purchase price up to $8,000..for example, if you purchased a property for $180,000 you are eligible for $180,000 x 10% = $18,000…so you will receive the full $8,000. If you purchase a home for $50,000 you will only be eligible for $5,000 ($50,000 x 10%= $5,000)
Persons who are claimed as dependents by a taxpayer or who are under age 18 do not qualify for a tax credit

$6500 Move up/Repeat Home Buyer Tax Credit

A Move up/Repeat Home Buyer is someone who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married tax payers,both spouses must qualify as long-time residents, with at least five years residency for each
Income limits for the tax credit are $125,000 for individuals and $225,000 for married couples filing jointly
The tax credit is equal up to 10% of the purchase price up to $8,000..for example, if you purchased a property for $180,000 you are eligible for $180,000 x 10% = $18,000…so you will receive the full $8,000. If you purchase a home for $50,000 you will only be eligible for $5,000 ($50,000 x 10%= $5,000) Same rules as the first time home buyer tax credit
This home cannot be for investment purposes….it must be your primary residence. You do not have to buy a home that is more expensive either, you can be someone who is looking to downsize and buy something cheaper.
This tax credit goes in effect November 6, 2009 and expires on April 30, 2010. The home must close by June 30, 2010
You must live in your residence at least 3 years for the tax credit not to be repayable. If you decide not to live there or sell your home before 3 years are up, you must pay back the government.

As always, consult with your accoutant if your income limits are unique. For further questions, check out the Goverments Tax credit site www.federalhousingcredit.com to answer more detailed tax credit info.