Get answers to questions about who qualifies and what home purchases are eligible.
The federal home buyer tax credit has been extended and expanded! Qualified first-time home buyers – who have not owned their principal residence in the past three years – may be eligible for a tax credit of up to $8,000. Repeat buyers may be eligible for tax credit up to $6,500.
At Eastbrook Homes we want you to have all the information you need to make buying a new first time home or buying your next home from us as easy as possible. More people will qualify than previously with this extended program. We have a list of federal government frequently asked questions (FAQ’s) about the extended tax credits now available for download. If you are thinking about a new first home or moving to a new home, this list will help answer common questions. With the housing market and interest rates at unprecedented value points, adding the tax credit makes buying a new home from Eastbrook Homes a smart decision. For additional information or to see examples of how the tax credits may apply to purchasing your first or next home contact us at info@eastbrookhomes.com.
Following are some sample questions:
Who is eligible to claim the $8,000 tax credit?
First-time home buyers purchasing any kind of home - new or resale - are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and on or before April 30, 2010. For the purposes of the tax credit, the purchase date is the date when closing occurs andthe title to the property transfers to the home owner. A limited exception exists for certain contract for deed purchases and installment sale purchases. See the IRS website for more detail. However, the law also allows home sales occurring by June 30, 2010 to qualify, provided they are due to a binding sales contract in force on or before April 30, 2010. Persons who are claimed as dependents by other taxpayers or who are under age 18 are not qualified for the tax credit program.
Who is eligible to claim the $6,500 tax credit?
Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit.
How is this home buyer tax credit different from the tax credit that Congress enacted in early 2009?
The tax credit’s income limits were increased, the documentation requirements were tightened, and the program’s deadlines were extended. What is the definition of a move-up or repeat home buyer? The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
To read the entire list download the FAQ list using the above download button. For additional information visit federalhousingtaxcredit.com, visit irs.gov or consult an accountant.
