Government Tax Credit

 

Update: The Government tax credit for current homeowners and first time home buyers expired on April 30, 2010.  If you did not go under contract by that date, you can no longer take advantage of this credit. 

 

HOWEVER, if you are a "member of the miliary and other certain federal employee serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010". Source: www.IRS.gov

 

Uncle Sam is giving $6500 to current homeowners who purchase a primary residence by April 30, 2010!! On November 6, 2009 President Obama signed a bill that not only extended the current $8000 tax credit for first time home buyers, but language was also added to the bill that now adds a $6,500 tax credit for repeat buyers!

 

A few additional items were also changed in the extension including raising the income limits for credit eligibility and only requiring a purchase contract be signed by April 30, 2010 with the closing occurring on or before June 30, 2010

More specifics on the repeat buyer tax credit of $6500:

  • Must have owned your primary residence 5 consecutive years of the last 8 years
  • Income must be below $125,000 for individual filers and $225,000 for joint filers to receive the full tax credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for a reduced credit.
  • Purchase price of residence must be below $800,000
  • Purchase contract must be signed by April 30, 2010 and the closing must occur by June 30, 2010.
  • You do not need to sell your existing primary residence (you could keep it as an investment property if you like)
  • You can claim the credit on your 2009 tax return even if you close in early 2010 (prior to April 15, 2010)
  • The new home purchased does not have to be larger or more expensive than your current home. You can downsize if you want to.
  • The new home purchased must be your primary residence.
  • Talk to your tax adviser to see if you qualify!