Congress has extended the homebuyer credit which will now qualify not only first time homebuyers (defined as a buyer who has not owned a home in the past 3 years) but also a homebuyer who has owned and lived in the same house at least 5 years. Here are the parameters:
- Is eligible to claim up to an $8,000 tax credit (maximum) or 10% of purchase price
- Purchase must occur on/after 1/1/2009 to 4/30/2010 (home sales occurring by 6/30/2010 allowed if binding contract by that date
- Owned same home at least 5 years
- $6,500 tax credit not to exceed $800,000 purchase price. The buyer’s income can not exceed $125,000 for a single tax payer or for married couples not to exceed $250,000. Purchase must occur after 11/6/2009 but before 4/30/2010.
A refundable tax credit means that if you pay less than the tax credit’s value in federal income taxes, then the government will write you a check for the difference. If you are due to receive a tax refund from the government, your refund will increase by the amount of the tax credit.
The guidelines are still being defined, so call if you have any questions or comments. We will find out the answer for you if we do not have it handy. Some of the parameters are still being defined.