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

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