Homebuyer Tax Credit Extended and Expanded to Include All Buyers

November 6, 2009 – President Barack Obama has approved the updated homebuyer tax credit to extend the tax credit until April 30, 2010.

The bill extends the $8,000 tax credit for first time homebuyers from the current November 30 deadline and expands the program to offer a credit of up to $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.

The following details apply to the homebuyer tax credit expansion:  

• First-time homebuyers  and buyers that have not owned a home in the past 3 years prior to the purchase may be eligible for up to an $8,000 tax credit.
• Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
• Income limits for single first-time homebuyers is up to $125,000, or up to $225,000 for married couples filing a joint tax return.
• The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.
• All homes being used as principle residence with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums.
• Vacation homes and rental property purchases do NOT qualify.
• All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.
• The tax credit does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

For a side by side comparison of the previous tax credit and the recently signed tax credit go to: http://www.realtor.org/fedistrk.nsf/files/government_affairs_tax_credit_ext_chart_110409.pdf/$FILE/government_affairs_tax_credit_ext_chart_110409.pdf

For more detailed information on the new tax credit, visit the National Association of Home Builders (NHAB) site at: www.federalhousingtaxcredit.com.