President Obama signs bill to extend and expand the homebuyer tax credit into 2010!
The measure is part of H.R. 3548, the Unemployment Compensation Extension Act. Under the law, the deadline for the first-time buyer tax credit of up to $8,000 is extended through April 30, 2010. Buyers will need to have a contract to purchase in place by April 30 and will have until July 1, 2010 to close. The credit also is expanded to provide up to a $6,500 tax credit for qualifying prospective buyers who already own their home and who have lived in it as their principal residence for five years.
Here are some basics to know about the new tax credit.
- First-time buyers who have not had interest in a principal residence for three years are still eligible, and the maximum amount remains the same – $8,000 (or $4,000 for married couples filing separately).
- Current homeowners, who have consecutively maintained the home they want to sell as their primary residence for five of the last eight years, are also eligible. However, the maximum amount for those homeowners is lower: $6,500 (or $3,250 for married couples filing separately).
- Qualifying buyers must sign a purchase agreement by April 30, 2010, and close before July 1.
- The tax credit may not be used to purchase a home for more than $800,000. Vacation homes are ineligible.
- The income limits to earn the maximum for both tax credits have been raised to $125,000 for single buyers and $225,000 for married couples.
- All buyers who want to get the credit must include documentation of the purchase on their tax returns.
- The credit is extended for through June 30, 2011, for members of the military serving outside the United States for at least 90 days.
This is a major victory for consumers and the housing market!