The first home-buyer tax credit ended November 30. To the joy of the real estate industry, in early November, President Obama extended the credit. The new law is not exactly the same as the old one. We will look at what changed and what stayed the same.
1. The maximum price of a qualifying home is $800,000. No credit is given for homes costing more.
2. The contract must be in place before May 1, 2010 and the transaction must close by July 1, 2010.
3. Repeat home-buyers now qualify for a 10% credit as well with a maximum credit of $6,500.
4. Income limits have been increased. The income limit has been raised from $75,000 to $125,000 for single taxpayers and $150,000 to $225,000 for married taxpayers.
What Stayed the Same?
1. The taxpayer must use the home as principal residence for the next three years.
2. Must not buy the home from a relative including parents, grandparents, children and grandchildren.
3. First-time still means anyone who has not owned a residence for the previous three years.
4. The tax credit remains at 10% of the purchase price with a maximum of $8,000.