A lot of folks have been asking me about the First-Time Home Buyer Tax Credit program. On November 6, 2009, Congress voted to extend and expand this program till April 30, 2010. To qualify for the $8,000 tax credit, home buyers must be under contract for a home no later than April 30, 2010, and closed no later than June 30, 2010.
Congress added to the program the “Move-Up” Buyers Program. To be a “move-up” buyer you had to have lived in your home for 5 of the last 8 years. Move-up buyers are capped at a total tax credit of $6,500.
Eligibility for either program is pretty simple:
- You can not purchase the home from a parent, spouse, or child
- You can not purchase the home from an entity in which they’re a majority owner (corporation)
- You can not acquire the home by gift or inheritance
- All parties to the purchase must meet eligibility requirements
- The property’s sales price may not exceed $800,000.
- Household income thresholds have been raised to $125,000 for single-filers and $225,500 for joint-filers.
The program is a true tax credit — not a deduction. This means that a tax filer who’s eligible for the full $8,000 credit and whose “normal” tax liability totals $6,000 would receive a $2,000 refund from the U.S. Treasury at tax time. You can search for a home of your dreams and receive a substantial tax credit.
The complete list of qualifying criteria is posted on the IRS website. Review it with a tax professional to determine your eligibility. Then mark your calendar for April 30, 2010. It’s a great time to buy.
