Once more, the government has extended the First Time Homebuyer's Credit. What is important about this extension is that a taxpayer must have purchased the home before May 1, 2010- that portion of the credit requirement did not change. The change, called the Homebuyer Assistance and Improvement Act of 2010, creates a longer period to close on the home. The extension moved the close date requirement from before July 1, 2010 to before September 30, 2010. Otherwise, the requirements and opportunities remain in place from the previous credit extension in November 2009.
I wrote about the requirements in a November blog post, and have reviewed the requirements below for those who need the information. As the credit reads now:
To qualify for the First Time Homebuyer's Credit, taxpayers must meet the requirements of first time home buyer and have a contract in place before May 1, 2010. First-time home buyers who have not owned a principle residence for 3 years prior to the purchase of a new home could continue to take a credit of up to $8,000, provided they close on the home before September 30, 2010. For homes purchased after December 31, 2008, the credit will not have to be repaid if the home buyer uses the home as their principal residence for 3 or more years.
Furthermore, 'first time homebuyer' includes taxpayers who have owned a home and used it as a principal residence for a 5-consecutive-year period during the 8-year period ending on the date of purchase of a new personal residence. Taxpayers in this situation may qualify for a credit of up to $6,500. Again, to act on this credit, the taxpayer must have a signed purchase contract for a principal residence in force before May 1, 2010 and must close on their home purchase by September 30, 2010. This credit is available for purchases of principal residents after November 6, 2009. After November 6, 2009, the home in question must have a value less than $800,000; otherwise, the taxpayer is not eligible for the credit.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.