First time home buyers tax credit

The first time home buyers tax credit extension and expansion awaits The President's signature on the bill (expected Friday, 11/6/09). If you are considering purchasing a home, or "moving up" to a larger home this is great news!

Here is some helpful information about the changes:

OLD = Jan 1, 2009 – November 30, 2009
NEW = December 1, 2009 – April 30, 2010

First-time Buyer – Amount of Credit:
OLD: $8000 ($4000 married filing separate)

NEW: $8000 ($4000 married filing separate)

First-time Buyer – Definition for Eligibility:
OLD: May not have had an interest in a principal residence for 3 years prior to purchase

NEW: Same

Current Homeowner – Amount of Credit:
OLD: No Provision

NEW: $6500 ($3250 married filing separate)

Effective Date – Current Owner:
OLD: No Provision

NEW: Date of Enactment

Current Homeowner – Definition for Eligibility:
OLD: No Provision

NEW: Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years.

Termination of Credit:
OLD: Purchases after November 30, 2009. (Becomes April 30, 2010 on Date of Enactment.)

NEW: Purchases after April 30, 2010.

Binding Contract Rule:
OLD: None

NEW: 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):
OLD:
$75,000 – single
$150,000 – married
Additional $20,000 phase out

NEW:
$125,000 – single
$225,000 – married
Additional $20,000 phase out

Limitation on Cost of Purchased Home:
OLD: None

NEW: $800,000 (Effective Date of Enactment)

Purchase by a Dependent:
OLD: No Provision

NEW: Ineligible (Effective Date of Enactment)

Anti-fraud Rule:
OLD: None

NEW: Purchaser must attach documentation of purchase to tax return.

Source: National Association of Realtors Issue Brief. "Homebuyer Tax Credit Changes"