Great news! The $8,000 first-time home buyer tax credit has been extended.
The tax credit, originally set up as a no-interest loan back in 2008, was converted this year as a full tax credit as part of the stimulus package for "first-time" buyers only. The new law extends the tax credit to all sales up to April 30, 2010, and extends the credit to existing home owners as well.
According to the Associated Press, the House voted 403-12 in favor of the law granting the extension.
"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.
The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.
The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.
For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.
While full details on the Federal Tax Credit can be found on this NAHB informational site, here are some of the key details:
- $8000 tax credit for first-time homebuyers extended for buyers who sign a contract by April 30, 2010 (and who close by the end of June).
- $6500 tax credit offered to homebuyers who have lived in their current residence at least five years and who want to “trade up” (buy a new primary residence).
- Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify (up from $75,000 for individuals and $150,000 for couples).
- Tax credit not applicable for those buying homes worth more than $800,000.
- Those who sell their new home or stop using it as their main residence within three years would have to repay the credit.