Recently Congress voted to extend and expand the home buyer tax credit. Which is great news if you weren’t able to close on your home purchase by the previous December 1, 2009 deadline. In addition the expansion of this tax credit helps current homeowners if you are looking to purchase a new home.
This means that there has never been a better time to purchase a home…but DO NOT WAIT!!! Congress has indicated this will be the last extension of this credit.
First-Time Buyers:
Many people don’t know that even if you’ve owned a home before you still might be considered a ‘First-Time Buyer’. That is because most lenders define a First-Time Buyer as anyone who has never owned a home OR has not owned a home for 3 years prior to your purchase.
The Tax Credit is a maximum of $8000 or 10% of the purchase price of your home (which ever is less). You now have until April 30th 2010 to enter in to a purchase contract for you new home and you will have until July 1, 2010 to close. So remember to have your purchase contracts executed prior to April 30th 2010 if you still want to qualify for the tax credit!
The income limits for the tax credit has also increased, so now single tax payers now qualify if they make $75,000 or less, or $150,000 or less for married couples filing jointly. This increase only applies to purchases that occured between November 6, 2009 and January 1, 2009.
Current Homeowners:
If you have lived in your current home for five consecutive years out of the last eight years you can qualify for a tax credit of up to $6500 or 10% of the purcahse price of your new home.
If you file your taxes individually and make more than $125,000 or $225,000 as a married couple filing jointly you are not be eligible for this credit.
FAQ’s:
1. Do I have to pay this tax credit back?
- As long as you stay in your new home for at least 3 years then NO.
- If you no longer use the property as your principal residence before that time, you are required to repay the credit.
2. What types of properties qualify?
- Any home, condo, or townhouse that will be used as your primary residence, as long as the home is less than or equal to $800,000.
- You cannot purchase a home from any family members.
3. How do you claim your tax credit?
- You do not get the credit at closing.
- You must claim the tax credit on your federal income tax return.
- This is not a deduction, it is a CREDIT so you get the entire amount of the credit.
- Make sure to speak with a qualified income tax specialist to ensure that you qualify for one of two previously mentioned tax credits, or any other tax credits, or deductions you qualify for.
- You do not need to apply, or get pre-qualified for the Tax Credits.
4. What else do I need to do to take advantage of these Tax Credits?
In order to purchase a home you need to have your financing in order!
If you are not a 100% cash buyer then you will need a loan. Right now rates are low and you can lock in those rates for 30 years! You can get Pre-Approved for a mortgage Today! It takes about 15 minutes and can be done over the phone by calling 1-877-FIXED-30 (349-3330) or you can start by clicking HERE.
To get started CLICK HERE for your FREE – NO OBLIGATION MORTGAGE RATE QUOTE!
