Tax Credit Details

Are there income limits?

YES - Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.

What are the eligibility requirements for current home owners?

Current homeowners must have lived in their home for 5 consecutive years out of the last 8 years.  So what this means is that if you are a homeowner now and wish to purchase a new home you must have lived in the home for at least the past 5 years. 

Another advantage to the new home buyer tax credit is that if you had sold your previous residence within the last two years, but lived in it for at least 5 years consecutively prior to selling it you can still take advantage of the new tax credit of $6500.00 as long as you have not purchased a home in the interim.

Is there a time limit to be able to take advantage of the new tax credit?

YES - The time limit for first time home buyers has been extended as well.  The new time limit is set first by executed contract dates and then by closing/funding dates.  The executed date for all purchase agreements must be on or before April 30, 2010 and the funding date must be on or before July 1, 2010.

Why type of documentation will I need to have in order to file for the tax credit?

The IRS form you will need to file can be found at the IRS website www.irs.gov and you have to have a copy of your closing statement or what is called your HUD statement attached to your tax return as proper documentation.  This is in response to the new Anti-fraud rules set in place to crack down on the number of fraudulent returns.

Will I have to pay the tax credit back if I sell my home?

NO - As long as you live in the home as your primary residence for 2 years then tax credit will not have to be re-paid.