Whether you agree or disagree philosophically with the government help programs, congress has extended the home buyer tax credit. It's no longer called the "First" time home buyer credit because it is available to certain non-1st time buyers. There are a lot of myths about who can get this tax credit, so please review the following:
Important date: May 1, 2010. This is the date that purchase contracts must be signed to be eligible. The transaction must close by July 1, 2010. But purchase contracts dated June 1st, for example, are not eligible even though they will close prior to July 1st because the contract was executed after the May1, 2010 deadline.
First-time Homebuyer: Tax Credit Amount = up to $8,000. How is this calculated? It is 10% of the home’s value or $8,000 whichever is less. So, any home over $80,000 will get a maximum tax credit of $8,000.
What is a First-time homebuyer? It is anyone that has not previously owned a home or has not owned a primary residence within the last 36 months. Individuals that currently own second homes or vacation homes but have not lived in them for the past 36 months may still qualify.
Existing Homebuyer: Tax Credit Amount = up to $6,500. This is for current homeowners that have lived in their current home for at least 5 years. So, if you purchased your home 2 years ago you would not qualify.
Military Bonus: If you served in our military for more than 90 days outside of our boarders, you get a one-year extension and have until 2011.
Income Limits: The tax credit begins to phase out for a single person that makes more than $125,000. For married couples it phases out at $225,000.
As always, please let us know if you have any questions.
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