American Recovery and Reinvestment Act of 2009, Homebuyer Tax Credit Provision. **Now extended to April 30, 2010** Summary: The bill provides for an $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before April 30, 2010. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. Details of the new credit include the following provisions*: - The new credit is an $8,000 (or up to 10% of the purchase price) refundable tax credit;
- A $6,500 credit has been added for "Move Up" buyers who have been in their current home for at least 5 years
- First Time Home Buyer (defined as someone who did not own another primary residence at any time during the three years prior to the current date of purchase);
- The home must be the principal residence;
- The home must be in the United States;
- Vacation homes and rental properties are not eligible;
- Home must be under contract by 4/30/2010 and closed by 6/30/2010
- The home must be owned and occupied for at least three years. If the home is sold prior to three years of ownership, the tax credit must be repaid;
- Income limits: Tax credit is not available to joint filers with a Modified Adjusted Gross Income (MAGI) above $225,000 and for singles with a MAGI above $125,000. Phase outs begins at $205,000 and $105,000 respectively;
- Not available if home is purchased from a close relative;
- Not available to nonresident aliens;
- Purchasers who bought prior to 1/1/2009 are still subject to the terms of the repayable credit.
- Tax credit provision of this law effective as of January 1, 2009; date of termination is April 30, 2010.
* Source: National Association of Realtors. For more detailed information, please review Department of the Treasury and IRS websites: IRS Press Release: www.irs.gov/newsroom/article/0 IRS Tax Credit Form 5405: www.irs.gov/pub/irs-pdf/f5405.pdf If you would like to take advantage of this one time offer by the federal government, we would be happy to assist and guide you along the path of homeownership and help you acheive the American Dream! Give us a call and lets get started on your journey of purchasing your first home. Lucia and Jim |