First Time Homebuyer Tax Credit Extends to 2010 and Expands to Existing Homeowners!
The First Time Home Buyer Credit which was part of the American Recovery and Reinvestment Act of 2009 (Obama's Economic Stimulus Package) was set to expire on November 30, 2009. However, President Obama signed the 2010 Homebuyer Tax Credits extending the tax credits to 2010. What's more, the new credit is no longer limited to first time homebuyers but now includes buyers who are selling or have recently sold their home. And, so much unlike the original tax package, the credit does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.
It's the best time to buy your new home now!I have been a currency trader for many years now, and as a trader I have been honed to look for opportunities where others fail to search. I have been trained to look at a plunging market as an opportunity to buy in and acquire investments at super bargain prices!
The real estate industry would be no different at all! Where all others shy away from buying a new home during these trying times, I would take it as a great opportunity (in fact a once in a lifetime opportunity) to buy in and invest in that much coveted new home. Real estate prices would be attractively depressed, mortgage rates are at an all time low....and most important of all, you can get as much as $8000 tax credit for your new home purchase through the 2010 Homebuyer Tax Credits !
So, if you've been dreaming of a new home, stop dreaming and act now. Take advantage of the 2010 Homebuyer Tax Credits
Who is Eligible
- First-time home buyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $8,000.
- Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $6,500.
- All U.S. citizens who file taxes are eligible to participate in the program.
- Home buyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
- For married couples filing a joint return, the combined income limit is $225,000.
- Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
- The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.
- The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.
Types of Homes that Qualify
- All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.
Tax Credit is Refundable
- A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
- For example:
- A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 tax credit).
- A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 tax credit).
- All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.
Buyers purchasing in 2010 will have the option to:
- Claim the credit on their 2009 return, even if the purchase is completed after December 31, 2009;
- Fill out Form 5405 to determine the amount of your available credit;
- Apply the credit when you file your 2009 tax return or file an amended return;
- Attach documentation of purchase to your return or amended return.
- File an amended return for 2009 if their purchase is completed after April 15, 2010; or,
- Claim the credit on their 2010 tax returns.
Invest wisely! Buy your new home now and be a happy new homeowner!
Watch this video to learn more about this tax credit!
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