Homebuyer Tax Credit Extended and Expanded
Congress voted to pass the home buyer tax credit, extending the deadline and expanding the credit to include buyers who have owned their home for five years. President Obama is expected to sign the bill on Friday, November 6th.
Following are highlights of the new bill which will be in effect December 1, 2009 - April 30, 2010:
First-time Buyers
The credit is a maximum of $8,000 for taxpayers filing jointly and a maximum of $4,000 for those filing separate.
First-time Buyers can not have owned a principal residence for 3 years prior to current purchase.
A binding contract, in writing, to purchase an owner occupied residence must be in effect no later than April 30, 2010 and the buyer can close on the purchase on or before July 1, 2010.
Income limits have increased from $75,000 to $125,000 for single buyers and from $150,000 to $225,000 for those filing jointly.
The cost of the home being purchased must not exceed $800,000.
Buyers must now attach documentation of the purchase to their tax return.
Current Homeowner Credit
The credit is a maximum of $6,500 for taxpayers filing jointly and a maximum of $3,250 for those filing separately.
A current homeowner must have used the home that they sold or is being sold as a principal residence consecutively for 5 of the previous 8 years.
A binding contract, in writing, to purchase an owner occupied residence must be in effect no later than April 30, 2010 and the buyer can close on the purchase on or before July 1, 2010.
The income limits and maximum home price are the same as those for first-time buyers and current homeowners must also attach documentation of the purchase to their tax returns in order to receive the credit.
Additionally, homeowners who collect the tax credit but sells the home within three years of buying it must return the refund.
Timing is more flexible for military families who have been deployed overseas for 90 days or more in 2008 or 2009. They would have until April 30, 2011, to sign a contract.
