Updated with information on the extension signed into law November 2009.
Home buyers act soon! The tax credit is only available for a limited time.
Contact Crye-Leike to Get Started.
For home purchases between Jan 1, 2009 and Nov 30, 2009...
You may be eligible for a $8,000 tax credit.
Please review detailed information on this page to determine eligibility.
For home purchases between April 9, 2008 and Dec 31, 2008...
You may be eligible for a $7,500 tax credit.
Click here to read more about your 2008 purchase.
Crye-Leike is not a tax consultant. Tax Credit information provided
for informational purposes ONLY. Consult your tax advisor for full,
complete details
Tax Credit Changes - A Comparison
National Association of REALTORS® Government Affairs Division
Congress has extended and expanded the homebuyer tax credit.
The modifications in the column labeled "December 1 - April 30, 2010"
became effective when President Obama signed the bill. All changes
made to the current credit become effective on that date, as well.
| Feature |
Jan 1 - Nov 30, 2009 Rules as enacted Feb 2009 |
Dec 1 - April 30, 2010 - Rules as enacted Nov 2009 |
| First-time Buyer - Amount of Credit |
$8000 ($4000 married filing separately) |
$8000 ($4000 married filing separately) |
| 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 separately) |
| Effective Date - Current Owner |
No Provision |
Date of Enactment |
| 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 |
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 |
$75,000 - single, $150,000 - married |
$125,000 - single, $225,000 - married |
| Limitation on Cost of Purchased Home |
None |
$800,000 |
| Purchase by a Dependent |
No Provision |
Ineligible |
| Anti-fraud Rule |
None |
Purchaser mut attach documentation of purchase to tax return |
Frequently Asked Questions
Question: Existing homeowner credit: Must the new house cost
more than the old house?
Answer: No. Thus, for example, individuals who move from a
high cost area to a lower cost area who meet all eligibility
requirements will qualify for the $6500 credit.
Question: I am an existing homeowner. On October 25, 2009, I
signed a contract to purchase a new home. I have lived in my current
home for more than 5 consecutive years and am within the new income
limits. I will go to settlement on November 20. If President Obama has
signed the bill by the time I go to settlement, will I qualify for the
ew $6500 tax credit?
Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.
Question: I am a firsttime homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?
Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you're within the phaseout range).
Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?
Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.
Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?
Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight what he did since 3 years doesn't impact eligibility.
Question: I am an eligible firsttime homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?
Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.
Home buyers act soon! This tax credit is only available for a limited time.
Contact Crye-Leike to Get Started.
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