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 up
to $6,500 credit to current home owners purchasing a
new or existing home between November 7, 2009 and
April 30, 2010.
Here is more information about
how the Extended Home Buyer Tax Credit can help
prospective home buyers. If you have specific
questions or need additional information, please contact
a tax professional or the Internal Revenue Service at
800-829-1040.
Who Qualifies for the Extended
Credit?
- First-time home buyers who
purchase homes between November 7, 2009 and
- April 30, 2010.
- Current home owners purchasing
a home between November 7, 2009 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.
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
allowable credit for current homeowners is
$6,500.
How is a Buyer's
Credit Amount Determined?
Each home buyer’s
tax credit is determined by two additional
factors:
- The Price of the
home
Under the
Extended Home Buyer Tax Credit, credit may only be
awarded on homes purchased for $800,000 or
less.
- The
Buyer's Income
Under the Extended Home
Buyer Tax Credit, which is effective on November 7,
2009, 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 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 credit
amount will be recouped on the
sale.
