First-time Home Buyer Tax Credit Extended and Expanded
Yesterday the president signed a billed that extended the First-time Home Buyer Tax Credit. This bill also expanded the credit beyond just first-time buyers.
The big differences between the original tax credit and the new and improved version are that now current homeowners are eligible for a $6,500 tax credit, the income limits to qualify have been raised, and the new expiration date is April 30, 2010 but if one has a binding contract by the deadline they can still get the credit if they close the sale before July 1, 2010.
Below is a chart provided by the National Association of Realtors® comparing the original and the new versions of the tax credit.
|
FEATURE |
Jan 1 - November 30, 2009 Rules as enacted February 2009 |
November 7 - April 30, 2010 Rules as enacted November 2009 |
|
First-time Buyer Amount of Credit |
$8000 ($4000 married filing separate) |
$8000 ($4000 married filing separate) |
|
First-time Buyer Definition for Eligibility |
May not have had an interest in a principal residence for 3 years prior to purchase |
Same |
|
Current Homeowner Amount of Credit |
No Provision |
$6500 ($3250 married filing separate) |
|
Effective Date Current Owner |
No Provision |
November 7, 2009 |
|
Current Homeowner Definition for Eligibility |
No Provision |
Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years |
|
Termination of Credit |
Purchases after November 30, 2009. (Becomes April 30, 2010 on Date of Enactment.) |
Purchases after April 30, 2010 |
|
Binding Contract Rule |
None |
So 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. |
|
Income Limits (Note: Increased income limits are effective as of date of enactment of bill) |
$75,000 - single, $150,000 - married, Additional $20,000 phase out |
$125,000 - single, $225,000 - married, Additional $20,000 phase out |
|
Limitation on Cost of Purchased Home |
None |
$800,000 November 7, 2009 |
|
Purchase by a Dependent |
No Provision |
Ineligible November 7, 2009 |
|
Anti-fraud Rule |
None |
Purchaser must attach documentation of purchase to tax return |
How will this affect the Omaha real estate market? Was this tax credit a good idea? Stay tuned for my follow-up blog post.
UPDATE: Here is the follow-up to this post - The First-time Home Buyer Tax Credit, was it a Good Idea?
