Christmas came early for realtors and home builders this year as Congress approved an extension on the home buyer tax credit which now includes a tax credit for existing home owners who are looking to sell and purchase a different home. Between November 7, 2009 and April 30, 2010, qualified home buyers can receive a tax credit of up to $8,000 on their home purchase. The government hopes this extended legislation will continue to help stimulate the housing market as well as the economy.
Who can Apply for the Extended Home Buyer Tax Credit?
First-time home buyers who qualify will continue to receive a tax credit of 10% of the home’s purchase price up to $8,000. A first-time home buyer is a person who has not owned a home for at least three years. If married, the spouse cannot have owned a home in that time frame either.
Under the current homeowner section of the program, any person who currently owns a home and is looking to sell and buy another home or has recently sold a home and is thinking of buying may qualify for a tax credit up to $6,500. However, the current home has to be the person’s primary residence and they must have lived in the home at least five consecutive years in the past eight years. As with the first-time home buyer credit, qualifying is dependent upon income.
Income qualifications apply to both sections of the program. Incomes up to $125,000 a year for a single person and up to $225,000 for a married couple can qualify for the maximum tax credit. For a single person whose income goes beyond the $125,000 up to the maximum of $145,000, and married couples who earn over $225,000 up to the maximum of $245,000, they still can qualify for a lower tax credit. People who have incomes over the maximum amounts cannot qualify for the tax credit.
Additional Extended Home Buyer Tax Program Details
Homes that qualify for the Extended Home Buyer Tax Credit include townhouses, condos, co-ops and single-family residences, either new or existing properties. No home over the price of $800,000 can qualify. The tax credit will be allowed on purchases up to the April 30, 2010 deadline as long as there is a written contract to purchase the home and the closing occurs by July 1, 2010. The buyer must live in the home for at least three years. If the home is sold before the three year time period, the tax credit must be paid back in full.
The passing of the Extended Home Buyer Tax Credit program makes this the perfect time to purchase a home. With the high inventory of homes for sale across the country at affordable prices and the lower-than-average interest rates available, it is a good time for people to buy their first home or move up to another one. People taking advantage of this opportunity may finally be able to own the home of their dreams.