First, the first time home buyer tax credit, up to $8,000, which was scheduled to expire Nov. 30, 2009, has been extended through April 30, 2010. The purchase contract must close by June 30, 2010. That's great news for those first time home buyers that were sitting on the fence or waiting to see if congress would increase the credit to $15,000. Well, they didn't get the increase, but they did get more time. So hurry to get into that first home, because the credit is set to expire April 30th.
Now for some more good news. The credit has been extended to homeowners that have owned their current home for five of the last eight years and want to purchase another residence. Current home owners are eligible for up to $6,500 tax credit. To be eligible, the home owner must (1) purchase a home worth less than $800,000, (2) purchase the home as their primary residence (not second homes or investment properties), and (3) have an income of less than $125,000 for single taxpayers and less than $225,000 for couples.
The new home must be their primary residence for at least 3 years following the purchase. If the home is sold or the buyer moves before 3 years, they must repay the full amount of the credit.
There are exceptions for military, foreign service and intelligence employees with extended service overseas. They will have until April 30, 2011 and June 30, 2011 to purchase a home.
The legislation goes into effect Nov. 7, 2009 and is NOT retroactive. Sorry, but buyers that already own a home and are currently in contract to purchase another one, do not qualify.
