Dwell Downtown Austin Blog

Home Buyer’s Tax Credit About to End

Posted in Real Estate Finance by Bryan Cady on March 2, 2010

Qualified 2009 and 2010 first-time home buyers can get up to 10% of the home’s purchase price or a maximum of $8,000. In November 2009, legislation extended a tax credit of up to $6,500 (or up 10% of the home’s purchase price) to long-time residents of the same primary residence if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their previous homes for a five-consecutive-year period during the eight-year period ending on the closing date of the new home.

Important details to remember:

  1. You don’t have to pay it back (as long as you stay in your qualified home for at least 36 months).
  2. If you qualify for the credit, you can still apply it to this year’s taxes, even if you’ve already filed your returns, or save it for your 2010 returns.
  3. This is a true tax credit, not a deduction. If you qualify for the full credit, there will be an actual dollar-for-dollar reduction of up to $8,000 (or up to $6,500 for qualified repeat buyers) on your tax bill now or in 2010.
  4. New income qualification limits have been put in place that expanded the pool of qualified buyers.
  5. If you purchased a qualified home or plan to after reading this article, you must have a contract in place by April 30, 2010 (with closing to take place by June 30, 2010), so don’t wait!

There are, of course, other details and qualification requirements and restrictions that you’ll need to consider. For a comprehensive explanation, contact your CPA.

Source: Stephen Steakley <stephen@urbanam.com>

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