What is the deal with $8,000 Tax Credit for First-Time Homebuyers?

The big financial news this week is that the Tax Credit for First-Time Homebuyers that was set to expire on November 30, 2009 has been extended until April 30, 2010. It also has been expanded to include a$6,500 tax credit for current home owners who buy a new house. President Obama is expected to sign the bill this morning.

Do you plan on buying a house?

Eligibility for the First-Time Homebuyer Credit

There are some requirements you have to meet before you can get the First-Time Homebuyers credit.

• You must be a first-time home buyer and you must have a purchase contract by April 30, 2010 and closes by .
• The house you purchase must be your primary residence and is not greater than $800,000.
• The buyer must live in the home for at least three years after the purchase date. You will have to repay the credit on a home only if the home ceases to be your primary residence within 3 years from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.
• The income limits have been raised for singles to $125,000 and married to $225,000.

Eligibility for the Existing Homebuyer Credit

• You must have lived in your current residence for 5 of the last 8 years.
• The house you purchase must be your primary residence and is not greater than $800,000.
• The buyer must live in the home for at least three years after the purchase date. You will have to repay the credit on a home only if the home ceases to be your primary residence within 3 years from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.
• The income limits have been raised for singles to $125,000 and married to $225,000.

Please check out the NY Times for more details and other provisions in the bill.

Your Thoughts

Will you buy a house within the tax credit’s extension? How much did the tax credit factor into your plans?

Photo Credit: roarofthefour

_{»crosslinked«}

Be Sociable, Share!

• 

• My Take: H&R Block Tax Cut In the interests of full-disclosure, I purchased H&R Block Tax Cut before signing up for affiliate ads.  We're filing our taxes ourselves this year and decided to get tax software. We don't believe our filing will be complicated, but between the move and some other changes, we wanted a program to......
• How to Start an IRA Without A Lot of Money Retirement planning is something many people avoid, thinking it's too hard or takes too much out of your paycheck. That's not the case. In fact, opening an IRA can easy, quick, and extremely beneficial to your finances. College students who work may sometimes have a job that offers a 401(k)......

• Escaping The Rat Race Here's another inspiring story on getting out of the rat race.How I escaped the rat raceCarole Dobson as told to Duncan HoodFrom the May 2006 issue of MoneySense magazineI used to work full time at a stressful job making a six-figure salary. Then, about 10 years ago, I started planning......
• Year End Tax Strategies It's that time of year again.  While taxes aren't technically due until April of next year, most of the techniques to manage this year's tax bill must be completed by January 1st.  Effective tax avoidance (not to be confused with tax evasion) comes down to two basic strategies: Eliminate as......