The First Time Homebuyer Credit has been extended and expanded!
With the new legislation signed on November 6th, 2009, the income limits increase to $125,000 adjusted gross income on a single return and $225,000 on a joint return. In addition, the so-called "move-up" credit is also in effect as of November 6. The " move-up credit is a new program for individuals who have used a home as a principal residence for five consecutive years of the past eight years. They will be eligible for a $6,500 refundable tax credit for purchases completed between November 6, 2009, and April 30, 2010.The new tax credits for first time buyers and for "move up" buyers only will be available for a limited time. Don't delay taking action if you want to take advantage of these credits.
Don't Get Left Behind.
(Please check the IRS's home page www.irs.gov for the complete details, elegibility criteria and restrictions of this government program or consult with your tax advisor. Below is a tably containing a summary of highlights). Additional good information can be found in the following Wall Street Journal Article.)
| Feature | Jan 2009 - Nov 30, 2009 Program | Dec 1 2009 - Apr 30, 2010 Program |
| First-time buyer amount of credit | $8,000 ($4000 married filing separately) | $8,000 ($4000 married filing separately) |
| First-time buyer definition of elegibility | May not have had an interest in a principal residence for 3 years prior to purchase | Same |
| Current Homeowner - Amount of Credit | No Provision | $6,500 ($3,250 married filing separately) |
| Current Homeowner - Definition of Elegibility | No Provision | Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years |
| Termination of Credit | Purchases after Nov 30, 2009 | Purchases after April 30, 2010 |
| Binding Contract Rule | None | So long as a binding written contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close |
| Income Limits | $75,000 single, $150,000 married, Additional $20,000 phase out | $125,000 single, $225,000 married. Additional $20,000 phase out |
| Limitation on cost of purchased home | None | $800,000 |
| Purchase by a dependent | No provision | Ineligible |
| Anti-Fraud Rule | None | Purchaser must attach documentation of purchase to tax return |
As a buyer, you must remain aware that the clock is ticking on the tax credits. A typical home purchase takes at the very least a couple of months between finding the right home, negotiating an offer, doing inspections and obtaining financing. So do not delay.