Home buyer Tax Credits About To Expire
By 1LT Bret Lucas, 132FW/JA
/ Published March 17, 2010
Des Moines, Iowa -- The first time home buyer and repeat home buyer tax credits are due to expire very shortly and there is no way to know if they will be extended further.
The Worker, Homeownership, and Business Assistance Act of 2009 provides an $8,000 tax credit for first-time home buyers purchasing a residence. The tax credit applies to sales occurring on or before April 30, 2010. If, however, a sales contract is signed by April 30, 2010, a home purchase may be completed by June 30, 2010 and will still qualify for the tax credit.
The Act does establish the following income limitations: $75,000 for single taxpayers and $150,000 for married taxpayers filing joint returns.
A "first-time home buyer" is a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, neither spouse can have owned a home during the prior three year period.
The Act also established a tax credit of up to $6,500 for move-up/repeat home buyers (existing home owners) purchasing a residence. This tax credit also applies to sales occurring on or before April 30, 2010. If, however, a sales contract is signed by April 30, 2010, a home purchase may be completed by June 30, 2010 and will still qualify for the tax credit.
A "move-up/repeat home buyer" is a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, both spouses must individually qualify for the tax credit. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
The tax credit is equal to 10 percent of the homes purchase price up to a maximum of $6,500.
For "move-up/repeat home buyers" the income limit for a single person is $125,000 and $225,000 for married persons filing a joint return. The tax credit amount is reduced for buyers with an adjusted gross income above those limits.
If you are considering purchasing a home, you may want to look into look into these tax credits before they are gone.