Home Buyer Tax Credit EXPANDED And Extended
November 18th, 2009 categories: Buyer Resource
In a recent article about the First Time Homebuyer Tax Credit, I may not have been as clear as I would have liked. One of our loyal readers, informed me that I could have been more clear, for her standards, on who might benefit from the expansion and extension of the Home Buyer Tax Credit. I will attempt to make things more clear.
The First Time Homebuyer Tax Credit was Extended a little more than a week ago, AND the tax credit was also Expanded. Expanded you ask? How was the first time homebuyer tax credit expanded? Let me explain…
The expanded tax credit NOW applies to current homeowners who have occupied a home they have owned for 5 of the last 8 years. The current homeowners who qualify for the expanded tax credit are eligible for a tax credit up to $6,500, while the first time home buyers are still eligible for the $8,000 tax credit.
The tax credit applies to Real Estate contracts that adhere to BOTH of the following dates:
- Buyers MUST be in written contract between November 7, 2009 and April 30, 2010, AND
- The Real Estate Contract MUST close on or before June 30, 2010.
Which Property Types Are Eligible For The Extended Tax Credit?
- Single Family Homes
- Condominiums
- Townhomes
- Co-ops
Tax credit eligibility depends upon two things:
- Maximum home purchase price. The credit will only be awarded on homes that are purchased with a sales price of $800,000 or less.
- Annual income of the buyer. In order to receive the FULL benefit of the tax credit, the buyer/buyers annual income must be no more than $125,000 for single filers, or $225,000 for joint/married filers. Buyers whose incomes are up to $145,000 for single filers and $245,000 joint/married filers can receive a prorated tax credit, with the amount of benefit decreasing as the annual income increases.
Amount of tax credit is also dependent:
- The tax credit amount is $8,000 for first time home buyers
- The tax credit amount is up to $6,500 for current homeowners who qualify
- The tax credit is a maximum of 10% of the purchase price of the qualifying property, up to the respective amounts listed above.
PLEASE NOTE: One extremely important detail that is not mentioned that often regarding the tax credit is:
- Repayment clause of the tax credit. If the owner occupies the home for 3 or more years, no repayment is necessary. However, if the homeowner sells the home within 3 years, the ENTIRE amount of the tax credit will need to be repaid.
Hopefully this explains the tax credit expansion a little more clearly.
If you have any questions about Sonoma County, or how the Homebuyer Tax Credit can benefit Sonoma County Real Estate buyers, please feel free to contact us.
