More Information on New Tax Credit
As you may already have heard, the President signed the tax credit bill this morning. The tax credit changes are effective tomorrow. Please see comparison chart below for what’s new like the new $800,000 purchase price limitation.
I suspect that this was added because they opened the credit to non-first-time homebuyers, but the chart below would lead one to believe that the limit would apply to both first-time and non-first-time homebuyers. Stay tuned for clarification on this point as we find out more.
Chart Courtesy of National Association of Realtors
HOMEBUYER TAX CREDIT: REVISED NOVEMEBER 2009
|
FEATURE |
Jan 1 – November 30, 2009 Rules as enacted February 2009 |
December 1 – April 30, 2010 Rules as enacted November 2009 |
|
First-time Buyer: Amount of Credit |
$8000 ($4000 married filing separate) |
$8000 ($4000 married filing separate) |
|
First-time Buyer: Definition for Eligibility |
May not have had an interest in a principal residence for 3 years prior to purchase |
Same |
|
Current Homeowner: Amount of Credit |
No Provision |
$6500 ($3250 married filing separate) |
|
Effective Date: Current Owner |
No Provision |
Date of Enactment |
|
Current Homeowner: Definition for Eligibility |
No Provision |
Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years |
|
Termination of Credit |
Purchases after November 30, 2009. (Becomes April 30, 2010 on Date of Enactment.) |
Purchases after April 30, 2010 |
|
Binding Contract Rule |
None |
So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close. |
|
Income Limits (Note: Increased income limits are effective as of date of enactment of bill) |
$75,000 – single $150,000 – married Additional $20,000 phase out |
$125,000 – single $225,000 – married Additional $20,000 phase out |
|
Limitation on Cost of Purchased Home |
None |
$800,000 Effective Date of Enactment |
|
Purchase by a Dependent |
No Provision |
Ineligible Effective Date of Enactment |
|
Anti-fraud Rule |
None |
Purchaser must attach documentation of purchase to tax return |
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