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The following is the latest information on the extension of the Federal Tax Credit for Homebuyers. Whether you are a buyer or a seller, this program can be of benefit to you. If you have any further questions, please feel free to contact one of the Churton Street Realty brokers.

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that: Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010 and Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

Who Qualifies for the Extended Credit? First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

Which Properties Are Eligible? The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available? The maximum allowable credit for first-time home buyers is $8,000. The maximum allowable credit for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined? Each home buyer’s tax credit is determined by two additional factors: the price of the home and the buyer's income.

Price: Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income: Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit. These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit? Yes, some buyers may still be eligible for the credit. The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010? Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid? No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

6 Surprising Facts About the Buyer Tax Credit
The homebuyer tax credit is not as simple or straightforward as you might think. Here are some nuances that will affect homebuyers who plan to use it:

To qualify for the move-up tax credit, a home owner must have occupied the same principal residence for five of the last eight years consecutively.
Buyers can elect to claim the credit on either their 2009 or their 2010 tax return, whichever is best for them.
Buyers who claim the credit in 2009 can't file electronically because the Internal Revenue Service hasn't put the required forms on line. The wait for a refund is three or four months.
The home can be a mobile home or travel trailer that is fixed to land owned or leased by the home owner. A mobile home or travel trailer that is actually mobile doesn't qualify.
The home can't be purchased from a close relative, including a parent, spouse, child, grandparent or grandchild.
A buyer who earns no taxable income or doesn't owe any federal income tax can qualify for the tax credit and file a tax return just to claim it.

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