Homebuyer tax credit 2010 now a reality
Image from Flickr.
Congress today passed a bill that extends the homebuyer tax credit, which was set to expire at the end of this month. Homebuyers who initiate their purchase between now and April 2010 will be able to take advantage of a $6,500 deduction in their federal taxes for that year.
Of course, this tax credit isn’t available to all homebuyers. And, of course, there have been some changes to the tax credit that exists through this month. The most noticeable change is the amount, reduced to $6,500 from $8,000. But, hey, if you really need the extra $1,500, you can always apply for a pay day loan. First-time homebuyers are still eligible for a tax credit up to $8,000.
More changes to homebuyer tax credit 2010
You may have noticed that I wrote “homebuyers who initiate their purchase” earlier. Anyone who has purchased a home knows that it doesn’t happen overnight, so the bill stipulates that the buyer must sign a sales contract by April 30 and close the sale by June 30 to get the credit.
This year, only people who had not owned a home for three years were eligible to receive the credit. Now, people who have owned their current home for at least five years can be eligible for the tax credit if they buy a new home. Also, the maximum income you can earn and still be eligible has been reduced to $125,000 for individuals and $225,000 for couples.
Exemptions from homebuyer tax credit
So, to review, people who have owned a home less than five years, people who make too much money and anyone who doesn’t sign a sales contract within the allotted time frame are not eligible for the credit.
Furthermore, the credit only applies to purchases of a primary residence. The cap on the home’s price is $800,000.
On a side note, the same bill that extends the homebuyer tax credit to 2010 also extends unemployment benefits so that people can collect them for an additional 13 weeks.
I previously owned a home for 4 years and 8 months. I then opened a construction loan in March of 2010. I did not move into the house once completed until November 10th. The loan then changed from a construction loan into a 30 year mortgage in December. It was a one time closing.
What do you consider my chances?
We bought a house in July, 2008 so we have been in this home for 19 months but we have been homeowners for 30+ years. If we want to sell this and buy another, are we eligible tfor the $6500 tax credit? Or do you have to be in the current owned house for 5 of 8 years?
K,
Unfortunately you are not eligible for the $6,500 credit because it applies to homes purchased between 11/6/09 and 4/30/2010 (contract signed before 5/1 and home closed by 6/30)
My husband & I owned a home for the last 7 years, we just closed on and moved into a new home on 9/17/2010. Are we eligible for this $6,500 credit or not?