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The $8000 Federal Tax Credit For First Time Homebuyers. How It Works And Who Can Get It.
AND The NEW $6,500 Tax Credit For Home Buyers!
With the stalled housing economy, the Federal Government is encouraging people to buy homes which will help lift the housing crisis. One way in which they are encouraging you to buy is by providing those that have not owned a home an $8,000 tax credit. For those that have owned a home previously, you may still get up to $6,500!
Here is a summary of how it works.
1 – Tax credit deadline is April 30, 2010.
2 – The “deadline” is has a different meaning. On July 2, 2010, President Obama signed the tax credit extension into law. If you have a house under contract by April 30th but have not been able to close yet, you now have until September 30th to get the home closed and take advantage of the tax credit. The extension only extends the closing deadline. It does not extend the purchase deadline.
3 – The amount is still up to $8,000 for first time buyers. You receive 10% of the home purchase price up to a maximum or $8,000
4 – Existing or previous homeowners can also get a tax credit of up to $6,500 as long as they have lived in the home they owned for at least 5 years. This is a big change from First Time Buyers only.
5 – You do not have to buy a home more expensive than your previous home.
6 – Income limits will be raised to $125,000 for single buyers and $225,000 for married buyers.
7 – Home purchase price limit would be capped at $800,000 making most home purchases eligible. Any home purchased over $800,000 is not eligible.
8- Married couples: The law tests both spouses. If one did not own but the other did, the law considers that both have owned.
9 - Newly signed laws take effect for homes purchased after November 6th, 2010. Homes purchased before this date are regulated by the previous tax credit laws.
10 - You do not have to pay back the tax credit as long as you live in the home for at least 3 years. if you sell before that time, you will be subject to repaying the entire tax credit.
11 - Can I use the tax credit for my down payment?
Sometimes. Most often the tax credit is received with your tax return. There HUD allows the money to be used as a down payment. Unfortunatley, there are few programs that allow for this in their lending guidelines. There is one. Call me and we can discuss if you are eligible for this program
I have a home under construction. Can I still get the tax credit?
Yes, as long as the home is under contract by April 30, 2010 and closes and title is transferred by September 30, 2010.
For complete information go to http://www.federalhousingtaxcredit.com/
* Keep in mind that we are not accountants and this is not intended to be tax advice so be sure to verify all information with your accountant.
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