Earlier today, President Obama signed new legislation extending the deadline for the home buyer tax credit into 2010 and expanding it to include current home owners who are looking to buy a primary residence.
The Basic Requirements
You qualify for the tax credit if the:
- Home you’re buying will be your primary residence
- Purchase price isn’t more than $800,000
This credit is not a loan; it’s yours, but keep in mind you have to live in your new home for three years. If you sell the home in less than three years, you’ll have to pay back the money.
With the new legislation, buyers have more time to find a home and more buyers are eligible for the tax credit:
- New deadline: To qualify, you need to be in contract with a seller by April 30th & close on the home by June 30th (The previous deadline was November 30, 2009).
- Not just for first-time buyers anymore: Home buyers who’ve owned and occupied a home for at least five consecutive years during the past eight years are eligible for a credit up to $6,500.
- Increased income limits: Individuals making less than $125,000 and couples making less than $225,000 are eligible (The limits used to be $75K & $150K).
First-time buyers are eligible for a credit up to $8,000 on homes purchased between January 1, 2009 and June 30, 2010. Qualified homeowners can a credit up to $6,500 on homes purchased between November 7, 2009 and June 30, 2010.
You can check out the full text of the bill. Scroll about halfway down to sections 11 & 12:
- Sec. 11. Extension and Modification of First-Time Homebuyer Tax Credit.
- Sec. 12. Provisions to Enhance the Administration of the First-Time Homebuyer Tax Credit.