The $8,000 first-time homebuyer income tax credit extension was signed into law. You can now use the credit if your home purchase is completed by June 30, 2010. The great part about this bill is that the extension also offers a tax credit for people who are purchasing a new residence, but aren't first-time homeowners.  The newly purchased home needs to be a primary residence.  The purchase cannot be rental property or vacation home.  Current homeowners can receive a $6,500 credit after purchasing a new home.  First time homeowners will still receive the $8,000 credit.   The legislation defines "first-time home buyers" as anyone who has not owned a principal residence in the three years prior to making the purchase. Under the the new law, home buyers must have a signed purchase contract before May 1, 2010, but they have until the end of June to actually close title.  The new law raises the annual income limits from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples.   Current homeowners utilizing the same income guidelines are eligible for an income tax credit of up to $6,500 when they purchase their next primary residence.  To be eligible, current homeowners must have lived in their home for five consecutive years over the previous eight .  Home buyers can obtain the credit on homes purchased between Nov. 7, 2009 and the end of April 2010.  They too need a signed purchase contract on a home before May 1, 2010 and close before the end of June.

The credit for both first time buyers and existing home owners can only be claimed on primary residences purchased for less than $800,000.  So long as they use the property as their primary residence for three or more years after the purchase, buyers don't have to pay it back.  By filing an amended return, the credit can be used on 2009 income taxes, even if the purchase was made in 2010.

Comments

Name *
Email (For verification & Replies)
URL
Code   

Submit Comment