$8000 Home Buying Tax Credit Extended To 2010 and Maybe Beyond?

Recently on November 6, 2009, President Obama signed “The Worker, Homeownership, and Business Assistance Act of 2009,” bringing homeowner dreams closer to first time home buyers and extending them to previous homeowners by extending the $8000 home buying tax credit.
The new law enhances and extends the American Recovery and Reinvestment Act of 2009 for first time home buyers. The Worker, Homeownership, and Business Assistance Act of 2009 also has a tax credit provision for move up and repeat home buyers. Details of both programs are below.

$8,000 First-time Home Buyer Tax Credit Details

The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a 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 percent 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 now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, 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 purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.

For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit Details

To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.

The tax credit does not have to be repaid.

The tax credit is equal to 10 percent 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 credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed 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 with incomes up to $225,000 qualify for the full tax credit.