Homebuyer Tax Credit Summary Qualifications
Purchasers can be a first-time home buyers or existing home owners.
The tax credit is for first-time buyers who have not owned a home in the past three years and for existing homeowners who have used the home being sold as a principal residence for five of the previous eight years.- For married couples, if one spouse has owned a home in the past three years, the couple does not qualify for the $8,000 tax credit.
- For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
- Unmarried joint purchasers may allocate the credit amount to the buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter.
- Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
- Homes cannot be purchased from other family members, your ancestors (parents, grandparents), your lineal descendants (children, grandchildren.) or your spouse or your spouse’s family members
A written binding contract to purchase needs to be in effect April 30, 2010 and the closing needs to take place by July 1, 2010.
The tax credit can be used on existing homes and new homes. Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence qualifies so long as it is purchased for $800,000 or less. The tax credit does not have to be repaid. If the home is resold within three years, the entire amount of the credit is recaptured on the sale.
The amount of the credit is equal to 10% of the home's purchase price up to $8,000 for first-time home buyers and 10% of the home's purchase price up to $6500 for existing home owners.
Income limits for the tax credit are $125,000 for singles and $225,000 for married couples. Income limits are based on modified adjusted gross income (MAGI). The tax credit can be used in conjunction with other state and local bond funding programs. Park Co. Realtors is providing the information for general guidance only. The information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
