On November 6, 2009, President Obama signed into law an extension to the $8,000 homebuyer tax credit that includes some new and expanded features:
- Credit available for purchases before May 1, 2010. Prospective homebuyers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
- Credit remains at $8000 for first-time purchasers. No change to definition of first-time homebuyer.
- New $6500 tax credit for repeat buyers who purchase before May 1, 2010. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years from date of purchase of new home.
- Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.
- New anti-fraud limitations are imposed.
All of the changes are effective as of November 7th. None of the new features are retroactive prior to this date. So if you closed on a new home prior to November 7th, you would only qualify if you are a first time homebuyer (never owned a primary residence in the last 3 years).
For those wanting to wade through the details, here’s a link to the full text of the new law. The tax credit extension and modification starts on page 6.
Here’s a NAR summary of the differences between the credit that was set to expire end of November and the credit extension (click chart for PDF):
Contact a tax professional or the IRS for guidance on how this credit may apply in your situation.
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