President Extends $8000 Tax Credit

Well, the long awaited extension for the first time homebuyer tax credit is now a reality.  President Obama signed the legislation on November 6, 2009.  The homebuyer tax credit was set to expire on November 30, 2009.  The new version of the tax credit still allows for first time homebuyers to receive up to $8,000 in tax credits as long as they have a contract sighed before May 1, 2010 and close on the property before July 1, 2010. 

The extension of this program also includes a $6,500 tax credit for repeat home buyers that have lived in their current primary residence for at least five consecutive years out of the past eight years.  The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $6,500.  Purchases of homes priced above $800,000 are not eligible for the tax credit.  If the contract for the home is signed on or before april 30, 2010, the transaction must close on or before June 30, 2010.  There is no requirement that you sell your current home, but you must live int he newly purchased home for which you receive the $6,500 credit. 

The credit also allows for a broad range of dwelling types such as new construction, existing homes, condos, manufactured or mobile homes and boats that function as a primary residence.  Credit cannot be claimed for second homes or investment properties.  There are income restrictions for obtaining the $6,500 credit.  To be eligible your adjusted household income cannot exceed $125,000 if you file singly, or $225,000 if you are married filing jointly.  For more information go the article on this program on the IRS web site at:  http://www.irs.gov/newsroom/article/0,,id=204671,00.html