Federal Housing Tax Credit

If you are thinking of buying a home in the next few months, this is a very good time to take action!. Aside from the fact that inventory is large and prices have come down substantially, the government is offering tax credits to first time home buyers and to repeat home buyers who have owned and lived in their previous home for 5 out of the last eight years. Below are the salient points.

First time Home Buyer Tax Credit – $8,000.

-This is for first-time home buyers only. The IRS defines first-time home buyer as someone who has not owned a principal residence during the three year period prior to the purchase.

-The tax credit does not have to be repaid

-The tax credit is equal to 10% of the home’s purchase price up to a maximum of $8,000.

-The tax credit applies only to homes priced at $800,000 or less.

-The tax credit applies now to sales occurring on or after January 1, 2009 and on or before April 30, 2010. In cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.

-For homes purchases on or after January 1, 2010 and on or before November 6, 2009, the income limits are $75,000 for a single taxpayer and $150,000 for married couples filing jointly.

-For homes purchased after November 6, 2009 and on or before April 30, 2010, the income limits are $125,000 for single taxpayers and $225,000 for married couples filing jointly.

Repeat Home Buyer tax Credit – $6,500.

-Buyers must have owned and lived in their previous home for 5 consecutive years out of the last 8 years.

-The tax credit does not have to be repaid

-The tax credit is equal to 10% of the home’s purchase price up to a maximum of $6,500.

-The tax credit applies only to homes priced at $800,000 or less

-The tax credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. Where there is a binding sales contract by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010

-Single taxpayers with incomes up to $125,000 and married couples, filing jointly, with incomes up to $225,000 qualify for the full tax credit.

As always, if you or any of your friends or family are ready to buy or sell a home, don’t hesitate to give me a call. I am here to serve you!