Via Mike Jones (SUNSTREET MORTGAGE, LLC):
$8,000 / $6,500 Tax Credit Legislation Extended and Modified for Home Buyers
Until the new legislation was signed into law, first time homebuyers could apply for and receive a tax credit in the amount of $8,000. when they purchased a home before the sunset date of November 30, 2009.
The new legislation, signed into law by President Obama on Friday, November 6, 2009
- extends that date until April 30, 2010 for civilians, and to April 30, 2011 for certain military buyers.
- increases the income limits so that millions more can qualify for the tax credit, and
- enacts a reduced tax credit of $6,500 for move-up buyers who are not first time homebuyers.
The existing sunset date established by the Housing & Economic Recovery Act of 2008 has been extended to April 30, 2010 for most buyers. Qualifying members of the military who served outside the borders of the United States at any time during the period from 1/1/2009 to 4/30/2010 will have an extra year to apply for the tax credit.
Increased Income Limits
The earlier legislation put caps on income for single buyers at $95,000. Married buyers filing jointly capped out at $170,000. The new legislation allows single wage earners to make up to $145,000, and married couples can earn up to $245,000.
NEW: $6,500 Tax Credit for Move-up Buyers
The new legislation provides a tax credit incentive for people who are not first time homebuyers. (A first time homebuyer is defined as one who has not owned a home in the last 36 months.) You may qualify for this $6,500 tax credit if you owned and lived in your home for five consecutive years out of the past eight. Who does that help? Let’s say you sold your home in 2008. You’re not a first time homebuyer, but if you meet the “five of eight” criteria, you can buy a move-up home and still qualify for the $6,500 tax credit. Check with your tax professional for advice on your particular situation.
NOTE: Additional Requirements
There are other rules of eligibility in the legislation. (This list is not exhaustive, so you’ll want to check with your tax professional.)
- You can’t buy the home from a relative.
- You must be 18 or older
- You cannot be claimed by any other taxpayer as a dependent
- If you’ve sold a home, and that sale affects your eligibility, you must included the settlement statement (HUD-1) with your tax return.
- Most buyers (check with your tax professional) must live in the home for a minimum of three years or face a government demand for repayment.
Above originally published on InvestmentRealEstateCorner.com by Mike in Tucson
Helpful links regarding the tax credits:
Quick chart of features (pdf file format)
Form to amend taxes if you close in 2009 (pdf file format)
Helpful article if buying & selling a home at the same time: if you are leaving your starter home for a larger home, read this to find out how to sell and buy at the same time!
Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area, including midtown Tulsa, downtown Tulsa, Broken Arrow, Owasso, Bixby, Sand Spring and Jenks, Oklahoma. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.