The Basics: Extended Home Buyer Tax Credit 2009/2010
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:
- Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
- Expands the credit to grant a $6,500 credit to current home owners purchasing a new or existing home between the date the bill is signed by President Obama and April 30, 2010.
Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Latest news:
Tax Credit Extension a Positive Step Toward Real
Estate Recovery (Nov.5)
President's Podcast: Tax Credit Extended
(Nov. 5)
Who Qualifies for the Extended Credit?
- First-time home buyers who purchase
homes between the date the bill is signed by
President Obama and April 30, 2010.
- Current home owners purchasing a home between the date the bill is signed by President Obama and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the
purchaser or his/her spouse may not have owned a
residence during the three years prior to the
purchase.
If you or your client purchased a home between
January 1, 2009 and the date the bill is signed
by President Obama, please see:
2009 First-Time Home Buyer Tax Credit.
Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000.
The maximum credit allowed for current homeowners is $6,500.
How is a Buyer's Credit Amount Determined?
Each home buyer’s tax credit is determined by tow additional factors:
- The price of the home.
- The buyer's income.
Price
Under the Extended Home Buyer Tax Credit, credit
may only be awarded on homes purchased for
$800,000 or less.
Buyer
Income
Under the Extended Home Buyer Tax
Credit which is effective on the date the bill
is signed by President Obama single buyers with
incomes up to $125,000 and married couples with
incomes up to $225,000—may receive the maximum
tax credit.
These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and the date the bill is signed by President Obama, please see 2009 First-Time Home Buyer Tax Credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
Part
of NAR's Right Tools, Right Now Initiative
Resources to help you better understand and
promote the value of the 2009 First-Time Home
Buyer Tax Credit to consumers are available for
FREE or AT COST as part of NAR's
Right Tools, Right Now initiative.
