Home Buyers Tax Credit Set to Expire

The Home Buyers Tax Credit is set to expire on April 30, 2010. Those eligible can get an $8000 credit for first time home buyers or $6500 for buyers who sell and buy another home.

You are eligible to take the first time home buyers credit if you haven’t owned a home for 3 years prior to the purchase. You get a tax credit of 10% of the purchase price up to $8000. The purchase price of the home can not exceed $800,000. Your adjusted gross income can’t exceed $125,000 for individuals or $225,000 for joint filers. A lessor amount of credit can be taken for incomes of $125,000 to $145,000 for individuals or $225,000 to $245,000 for joint filers. The credit disappears when those upper limits are reached.

The home buyers credit of $6500 is also available to those that sell their home and buy another. To be eligible you have to have used the home as your principal residence for 5 consecutive years of the last 8. Home price and income limits are the same as the first time home buyers credit. If you are in a binding contract by April 30, 2010 and you settle by June 30, 2010, you are still eligible for the credit for first time buyers as well as move up buyers.

This is just a brief summary of the Home Buyers Tax Credit. For more information contact your tax professional or the IRS at 800 829-1040.

With low interest rates, depressed home prices and the tax credit, it is a great time to buy a home! It is possible that the credit could be extended again due to the poor economy. We will have to wait and see what our elected officials come up with next!

Mark Frohlich is a local Realtor who serves the Rancho Cordova area.

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Posted by Mark Frohlich on Mar 15 2010. Filed under Viewpoints. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

Billy

March 16, 2010 - 3:24 pm

I’d like to clarify for you; you ARE eligible for the first time home buyer credit if you haven’t owned YOUR PRINCIPAL RESIDENCE in the last 3 years. You can own a rental property, or multiple rental properties, as long as you are renting your principal residence from somebody else.
http://www.irs.gov/newsroom/article/0,,id=206294,00.html (S3)

Also, somebody trying to get the $6,500 credit for existing home owners doesn’t have to sell their current home… just move out of it. They can keep it as a rental property. Which is good to know since this isn’t the best time to sell!