Tax Credit Extended – Expanded - Tucson AZ Homes For Sale

Tax Credit Extended – Expanded

February 1, 2010

Time grows short to take advantage of this tax credit. Here is a quick table showing in summary form what I published last week; “Tucson Time to Get Moving” .

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress passed new legislation that:

Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Here is a summary of the new tax credit rules:

EXTENSION OF FIRST-TIME BUYER CREDIT
	Jan. 1 – Nov. 30, 2009 Rules as enacted Feb. 2009	Nov. 7 – Apr. 30, 2010 Rules as enacted Nov. 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
EXPANSION TO CURRENT HOMEOWNERS
	Jan. 1 – Nov. 30, 2009 Rules as enacted Feb. 2009	Nov. 7 – Apr. 30, 2010 Rules as enacted Nov. 2009
Current Homeowner Amount of Credit	No Provision	$6500 ($3250 married filing separate)
Effective Date Current Owner	No Provision	November 7, 2009
Current Homeowner Definition for Eligibility	No Provision	Must have used home 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
Income Limits	$75,000 – single $150,000 – married Additional $20,000 phase-out	$125,000 – single $225,000 – married Additional $20,000 phase-out

NEW RULES
The revised tax credit has several rules that were not outlined in the previous legislation:

Binding Contract Rule. 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.
Limitation on Cost of Purchased Home. Effective November 7, 2009, there is an $800,000 limit on the home cost.
Purchase by a Dependent. As of November 7, 2009, this is explicitly ineligible for the credit.
Anti-Fraud Rule. Purchasers must now attach documentation of the purchase to their tax returns.

Remember: If the property is sold within three years from the date of purchase, the buyer must pay back the full amount of the credit. This is not a new rule, just a reminder.

Source: NAR Issue Brief – Homebuyer Tax Credit