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Federal Home Buyer Tax Credit
The Worker, Homeownership, and Business Assistance Act of 2009 has extended home buyer tax credit for
first-time home-buyers to receive up to an $8,000 and tax credit and current home-owners to move up and
receive up to a $6,500 tax credit.
- The home must cost $800,000 or less, and the binding sales contract must be signed by April 30th, 2010
with the transaction completed by June 30, 2010.
- To qualify for the first time home-buyer tax credit, the buyer must not owned a home during the
three-years prior to the purchase.
- To qualify for the repeat home-buyer tax credit, the purchaser must have owned and
lived in their home for five consecutive years out of the last eight years.
- This is a "refundable" tax credit, which means that the credit can be claimed
even if is more than the total taxes that are due or were withheld.
- The IRS allows the credit to be applied for either
the 2009 or 2010 tax years. If you already filed for for 2009, you may
submit an amended return.
- FHA mortgages
allow a bridge loan to be used for the down payment and closing costs as long
that will be repaid when you receive the tax credit from the IRS.
- The previous income limits of $75,000 for individuals and $150,000 for married couples has been raised for sales occurring
after November 6, 2009 to $125,000 for individuals and $225,000 for married couples.
- The tax credit must be repaid if the home is sold or ceases to be the buyer’s principal residence within
three years after the purchase.
For more information, refer to the following web references:
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