The popular homebuyer tax credit program, which was due to expire November 30, 2009, has been extended to April 30, 2010. Adding to the good news is the fact that it is no longer confined to just first-time homebuyers.
The rules are that the first-time homebuyer can not have had interest in a principal residence for three years prior to the purchase. A current homeowner must have used their existing home as a principal residence for five of the previous eight years. The first-timer gets an $8,000 credit ($4,000 if married filing separately), while the existing homebuyer gets a $6,500 credit ($3,250 if married filing separately).
All other provisions of the Tax Credit are the same for both first-time homebuyers and current owners.
The prospective property must be put “under contract” before May 1, 2010 and the transfer must take place by July 1, 2010. The income limits are $125,000 for a single person and $225,000 for a married couple (up from $75,000 and $150,000) for a full tax credit. A partial tax credit is given for $125,000 to $145,000 for singles and $225,000 to $245,000 for married couples. Above those incomes is no tax credit.
The maximum price of the property being purchased is $800,000. The property transfer can not be between dependents (parents and child or grandchild) and documentation of the purchase must be attached to the tax return. Parents can still, however, co-sign on the mortgage and the child gets the tax credit.
All in all, the homebuyer tax credit is a good deal. If only it was permanent.
- Mountain Man
