OK, you have heard by now that congress has passed and the president has signed the bill that extends the tax-credits for home buyers. It is what it is, and it may help with the sale of homes in the marketplace, it may just be postponing the inevitable market correction. But, hey, it is here and we can use it, (maybe). There are still some qualifiers, and if you are considering the purchase of a home, anytime soon, it is great to have options!

The following is a summary of my understanding of the 2010 program. Listed are some major points that may help sort through the details.

$8,000 First-time Home Buyer Tax Credit Major Points:

  • The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
  • The tax credit does not have to be repaid.
  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
    The tax credit applies only to homes priced at $800,000 or less.
  • The tax credit now applies to sales occurring on or after January 1, 2009 and or before April 30, 2010.
  • However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
  • For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
  • For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit Major Points:

  • To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
  • The tax credit does not have to be repaid.
  • The tax credit is equal to 10 percent of the home’’s purchase price up to a maximum of $6,500.
  • The tax credit applies only to homes priced at $800,000 or less.
  • The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010.
  • However, in cases where a binding sales contract is signed by May 1, 2010, the home purchase qualifies provided it is completed prior to July 1, 2010.
  • Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

So there you go, hope this helps. Let me know if you need the help of a professional.