The stimulus bill signed into law by President Obama for first time homebuyers in the form of an $8,000.00 tax credit was extended and expanded to people with higher incomes and a $6,500.00 tax credit to those who want to trade up into new homes!
Here’s how the extension and expansion of the credit work in a nutshell:
To qualify for the credit:
• A contract of sale must be signed before April 30, 2010; and
• Closing must take place by June 30, 2010.
To qualify as a first-time home buyer:
• The purchaser (and the purchaser’s spouse) may not have owned a home in the 3 years prior to the purchase date of the new home.
• The new home must be the purchaser’s primary residence.
• The new home purchase price must be less than $800,000.00.
To qualify as a move-up or repeat home buyer:
• The purchaser (and the purchaser’s spouse) must have owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date.
• The new home must be the purchaser’s primary residence.
• The new home purchase price must be less than $800,000.00.
• The tax credit is subject to the following Adjusted Gross Income (AGI) limitations:
• Full tax credit if AGI is less than $125,000.00 for singles & $225,000.00 for joint filers.
• The credit phases out for AGI up to $145,000.00 for singles & $245,000.00 for joint filers.
Credit Amount:
• The amount of the credit is the lesser of:
• 10% of the home purchase price; or
• $8,000.00, if a first-time home buyer; or
• $6,500.00, if a move-up or repeat home buyer.
Repayment Obligations:
• If the home is owned for more than 3 years, NO PORTION of the $8,000 credit is due.
• If the home is sold within the first 3 years, the full amount of the credit is due upon sale.
Income Tax Treatment:
• The credit will be claimed on the purchaser’s income taxes.
• Any amount in excess of taxes owed will be refunded to the purchaser.
With savings like this there is no better time to purchase a new home!
Contact Cozy Quarters Realty today to get started on the path to home ownership!