Tax Credit: You Don't Have to Be a First-Time Home Buyer to Take Advantage
Lately, we have heard a lot about the First Time Home Buyer's $8,000 tax credit. But many current homeowners are unaware that there is a tax credit that benefits them as well. The Worker, Homeownership, and Business Assistance Act of 2009, which went into effect on November 6, 2009, established a tax credit of up to $6,500 for qualified move-up/repeat home buyers.
Here are the basics you need to know:
1) You qualify if you've owned and resided in your current home for a consecutive five out of the past eight years
2) If married, both spouses must qualify as long-time residents, with at least five years of principal residency for each
3) Your adjusted household income cannot exceed $125,000 if filing individually and $225,000 if married and filing jointly
4) The new home being purchased MUST be a primary residence
5) Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit
6) The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $6,500; Purchases of homes priced above $800,000 are not eligible for the tax credit
7) Any home that will be used as a principal residence qualifies for the credit. This includes single-family detached homes, attached homes (such as townhouses and condominiums), manufactured homes (a.k.a. mobile homes), and houseboats.
8) The tax credit is refundable, which means it can be claimed even if the taxpayer has little or no federal income tax liability to offset. This usually involves the government sending the taxpayer a check for a portion or even the entire amount of the refundable tax credit
9) A contract to purchase the new residence must be signed by April 30, 2010 and the closing must take place by June 30, 2010
If you're looking to sell and/or purchase a home and want to know if you are eligible for the home buyer tax credit, please contact a Chicago real estate agent today!
Posted at 03:16PM Jan 25, 2010 by Chandra Rose in Buying Comments[0]
