New home buyer tax credit details

Congress has extended and expanded the home buyer tax credit for 2009-2010, which is great news for sellers and buyers!

The modifications in the column labeled “December 1 – April 30, 2010” become effective when President Obama signs the bill. All changes made to the current credit become effective on that date, as well.

PROGRAM FEATURE	Jan 1 – November 30, 2009 Rules as enacted February 2009	December 1 – April 30, 2010 Rules as enacted November 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
Current Homeowner Amount of Credit	No Provision	$6500 ($3250 married filing separate)
Effective Date Current Owner	No Provision	Date of Enactment
Current Homeowner Definition for Eligibility	No Provision	Must have used the home sold or being sold 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
Binding Contract Rule	None	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.
Income Limits (Note: Increased income limits are effective as of date of enactment of bill)	$75,000 – single $150,000 – married Additional $20,000 phase out	$125,000 – single $225,000 – married Additional $20,000 phase out
Limitation on Cost of Purchased Home	None	$800,000 Effective Date of Enactment
Purchase by a Dependent	No Provision	Ineligible Effective Date of Enactment
Anti-fraud Rule	None	Purchaser must attach documentation of purchase to tax return

Source: NAR