Real Estate Insights

I've been getting a lot of questions regarding the new homebuyer tax credit just passed into law last week. You may already know that as part of the Homeownership and Business Assistance Act of 2009, the firt time homebuyer tax credit from last year has been extended and improved in several different ways:

Tax Filing Deadline has been Extended - Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return

Tax Credit Extended to Existing Homeowners - Not only are first time homebuyers eligible but the tax credit has been extended to include existing homeowners as well. Now homebuyers 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 new principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.

Qualifying Income limits have been Increased - People with higher incomes can qualify for the tax credit.

• Homebuyers 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. 

There is a lot of information available on the new homebuyer tax credit but the best places for the most accurate updates are:

• National Association of Realtors - Comparison Chart
• The IRS website - http://www.irs.gov/newsroom/article/0,,id=204671,00.html?portlet=7
• National Association of Home Builder's website - http://www.federalhousingtaxcredit.com/home.html