Home buyer tax credit is expiring

By josephine on Apr. 29, 2010.

The Miami Herald

3/19/10

Home buyer tax credit window closes on April 30

If you’re hoping to buy a home this year but have been on the fence about making your move, don’t forget that your window of opportunity to qualify for a potential tax credit is steadily closing.

First time and repeat buyers meeting the specified the requirements and to receive up to $8,000 and $6,500, respectively, in federal tax credits. The catch is that the homes must be purchased on or before April 30, 2010. In special circumstances, the credits are still available as long as first time or repeat buyers enter into a binding sales contract signed by April 30, 2010 with the purchase transaction completed by June 30, 2010.

The National Association of Home Builders have created a great  federal housing tax credit site with helpful information, tips and FAQs detailing the opportunities and conditions available to you through the Worker, Home ownership, and Business Assistance Act of 2009. For your convenience, we’ve provided some fast facts below, but we encourage you to check out additional resources or discuss these opportunities more closely with your agent or broker.
Fast Facts: First Time Buyer Tax Credit

• A first time buyer is defined as any buyer who has not owned a principal residence during the three-year period preceding the initial home purchase. For married taxpayers to qualify, this (non-)home ownership stipulation must hold true for both the buyer and his/her spouse.

• A first time buyer meeting the qualification and time limitation requirements is eligible to claim the federal tax credit for any principal home purchase, including new or resale, provided that the purchase price does not exceed $800,000.

• The first time buyer tax credit is equal to 10 percent of the home’s purchase price, up to a maximum of $8,000.

• The qualifying income limits are $125,000 for single taxpayers and $225,000 for married taxpayers filing a joint return. Partial tax credits apply for buyers with a modified adjusted gross income (MAGI) as defined by the IRS.

• Qualifying first time buyers can claim the tax credit on their federal income tax return, allowing for a dollar-for-dollar reduction in what they owe in taxes.

Fast Facts: Repeat Buyer Tax Credit

• A repeat buyer is defined as a long time resident who has owned and lived in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers to qualify, both the buyer and his/her spouse must meet the required five years of principal residency stipulation.

• A repeat buyer meeting the qualification and time limitation requirements is eligible to claim the federal tax credit for any principal home purchase, including new or resale, provided that the purchase price does not exceed $800,000.

• The repeat buyer tax credit is equal to 10 percent of the home’s purchase price, up to a maximum of $6,500. The qualifying income limits are identical to the first time buyer tax credit requirements (including additional conditions for taxpayers with MAGI).

• Qualifying repeat buyers can claim the tax credit on their federal income tax return, allowing for a dollar-for-dollar reduction in what they owe in taxes.