First Time Homebuyer’s Tax Credit

Everyone knows the first-time homebuyers tax credit expired on April 30th,right? Well, not so fast…

Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

http://www.irs.gov/newsroom/article/0,,id=215594,00.html

New First-Time Homebuyer Tax Credit

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.

For home purchases after January 1, 2009 and before December 1, 2009, many taxpayers are eligible for the credit.  Some of the highlights are:

  • Maximum credit allowed is $8000
  • Purchasers who utilize revenue bond financing can use the credit
  • No repayment for purchases between January 1 and December 1, 2009
  • If the home is sold within 3 years of the purchase, the entire amount of the credit is recaptured with the sale.  This applies only to homes purchased in 2009.

 

  • The program terminates December 1, 2009
  • Still available for first time buyers only. Three year rule continues to apply.
  • Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.