Time is running out!
First time home buyers
$8,000
Qualified existing home buyers
$6,500
An eligible taxpayer must buy, or enter into a binding contract to buy a primary home on or before April 30, 2010. You must close by June 30, 2010 BUT an extesion is getting voted on. The extension has been passed by the House of Representatives. The Senate must still approve the extension before President Obama can sign it into law. If approved you will have until September 30 , 2010 to close. This will help the volume of buyers close and claim the tax credit.
Official Link and Update from IRS
* Details provided in both English and Spanish
* Military benefits
* Link to tax form 5405
* Q & A
* Tax form 5405
Most important was the announcement of $8,000 first time home buyer tax credit extension!!
Brief details regarding the Tax Credit for Primary Home Buyers.
President Obama has signed a bill to extend the first time home buyers tax credit through June 30, 2010. The bill states you must be in contract no later then April 30, 2010 but you have to close prior to June 30, 2010. The bill also provides a tax credit for those current homeowners buying a new primary home.
First time home buyers definition: individuals that have not owned a home in the past 3 years. The total credit is 10% of the purchase price of the home or a maximum credit of $8,000.
Current homeowner’s definition: If you currently own a residence that you have lived in as your primary for the last 5 out of 8 years or 5 consecutive years you are eligible. The incentive is a maximum tax credit of $6,500.
Increased Income Adjustments:
Single taxpayers who earn up to $125,000 are eligible for the total credit amount. If you earn more then $125,000 but less then $145,000 you are eligible for a partial credit. If your current income exceeds $145,000 you are ineligible.
Joint taxpayers who earn up to $225,000 are eligible for the total credit amount. If you earn more then $225,000 but less then $245,000 you are eligible for a partial credit. If your current combined income exceeds $245,000 you are ineligible.
Maximum sales price for a new home is $800,000.
Unfortunately you are not eligible to receive the tax credit upfront at closing. IRS has started to prosecute companies claiming to provide this service.
Here are additional tax credit restrictions:
If you purchase the home from a close relative (spouse, parent, grandparent)
*Step relative does not count!
Purchaser does not use the home as a primary residence
They sell the home before year end
They are a non resident alien
Thanks
The Mortgage Reel
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