First time homebuyer tax credit extension

The $8,000 first time homebuyer tax credit of 2009 has been extended until April 30th, 2010. By the deadline you must be in a written binding contract, but will have until July 1^st, 2010 to actually close on a home.  A first time homebuyer is someone who has not owned a home in the last three years.

There are some changes to eligibility and limitations in this provision that were not part of the 2009 bill.   The maximum amount of the purchased home cannot exceed $800,000, where previously there was no max.  Also, the income levels have increased from $75,000 to $125,000 annual income for singles and from $150,000 to $225,000 for married couples.

The provision for the extension also included a $6,500 tax credit for current homebuyer’s purchasing a new home, that was not in the original bill.  This includes homebuyer’s who have lived in their home five consecutive years out of the last eight.  In purchasing a new home, the home does not need to cost more than the old house.  If you move from a high cost area to a lower cost area, you are still eligible.  Also, if you sold your home two years ago, and plan to buy a home between now and April 30^th 2010, you are eligible if you lived in that home for five consecutive years.

The changes made have opened the tax credit to a lot more individuals than before.  Take advantage of low home prices and this tax credit before it goes away for good!