Simplifying the Home Buyer Tax Credit

Earlier this month President Obama signed a bill extending the first time home buyers $8,000 tax rebate. Included in that bill is an expansion of the original plan to include existing homeowners. The expansion provides a $6,500 tax rebate for qualified buyers who already own their home. Both tax credits will be in effect until April 30, 2010. These provisions offer a tremendous opportunity for first time home buyers and certain existing homeowners to buy a home before the April deadline.

"The only thing I would say is that if history teaches us any lessons we should move forward sooner rather than later," says Mark Sauers, Assistant Vice President with Sun Trust Mortgage. "April 30 will be here before we know it. I really do not expect any further extensions beyond this."

With all that being said, the following guide will simplify the qualification process for homeowners looking to take advantage of the home buyer tax credit.

$6,500 Tax Credit for buyers who already own their home:

1. Income qualifications: Single taxpayer incomes must not exceed $125,000 and married couples income can not exceed $225,000.

2. Purchase date qualifications: Purchase must be after November 6, 2009 and on or before April 30, 2010.

3. Ownership qualification: Buyers must have lived in their previous home for five consecutive out of the past eight years. The purchase price of the new home can not exceed $800,000 and the new home must be a personal residence (non investment or non-owner occupied).

The total tax rebate is equal to 10% of the purchase price, up to a total of $6,500 and does not need to be repaid to the Government.

$8,000 First time home buyer tax credit:

1. Income qualification: Single tax payer income can not exceed $125,000 and couples filing jointly can not exceed $225,000.

2. Purchase date qualification: All sales that occur between January 1, 2009 and April 30, 2010.

3. Buyer qualification: Anyone who has not owned a home during the previous three years prior to current purchase.

The same tax credit structure applies to the first time home buyer. The total tax rebate is equal to 10% of the purchase price, up to a total of $8,000 and does not need to be repaid to the Government.

Contact a Realtor for information about homes for sale in your price range, as well as the home purchase process. He/she can also recommend a qualified home mortgage consultant who can pre-qualify you for your purchase and discuss available mortgage programs to meet your financial needs.

Chuck Webb, Wilkinson & Associates, wwwChuckWebb.net