2009/2010 Expanded Home Buyer Tax Credit
Thursday, November 12, 2009
Here are four major points you need to know about the 2009/2010 Federal Home Buyer Tax Credit:
1. For first-time home buyers: The credit can go as high as $8,000 for qualified, first-time home buyers. (The legislation defines “first-time home buyer” as anyone who has not owned a principal residence in the three years prior to making the purchase.) Home buyers must have a fully executed, binding, Purchase and Sales Agreement, before May 1, 2010, but you have until June 30th to actually close the transaction. The annual income limit is $125,000 for singles and $225,000 for married couples.
2. For current home owners: Most current homeowners are eligible for a tax credit of up to $6,500 when you purchase your next primary residence. Current homeowners must have lived in their home for five consecutive years over the previous eight to be eligible. Qualified home buyers can obtain the credit on homes purchased between November 7, 2009 and June 30, 2010. ( Just like the provision for first-time buyers, you must have a fully executed, binding, Purchase and Sales Agreement, before May 1, 2010 and close no later than June 30, 2010.) The income limits for current homeowners are the same as those for first-time home buyers.
3. Classification of Property and Purchase Price limitation: The credit can only be claimed on primary residences purchased for less than $800,000. And as long as you use the property as your primary residence for three or more years after the purchase, buyers don’t have to pay the credit back. If you do sell before the third anniversary of your purchase, the entire credit must be ‘paid back’ to Uncle Sam.
4. How To Obtain The Credit: Anyone claiming the credit must provide documentation, such as a copy of your HUD-1 Settlement Statement, to prove that the sale has closed. A big bonus is buyers can claim the credit on their 2009 taxes, even if the purchase was made in 2010 by filing an amended return!
Do you think this is a good use of your tax dollars? Weigh in! - Scott Askew
Posted in: Intown Atlanta Real Estate News