First-time Homebuyer Tax Credit

It’s still not too late to get up to $8,000 Homebuyer Tax Credit. On November 6th, 2009, the government has extended and expanded the Homebuyer Tax Credit (formally known as The Worker, Homeownership and Business Assistance Act of 2009).

Under the new law, a homebuyer “must buy, or enter into a binding contract, a principal residence, on or before April 30, 2010 and close on the home by June 30, 2010″.

The maximum tax credit amount is $8,000 for a first-time homebuyer (a buyer who has not owned a primary residence during the 3 years up to the purchase date).

The new law also provides up to $6,500 credit for current homeowners, who used their current primary residence for at least 5 consecutive years during the past 8-year period prior to purchase of a new primary residence.

New Income Limits:

The new law has raised the income limits, so individuals making up to $125,000/year (or joint-filing couples making up to $225,000/year) can qualify for the full credit. A reduced credit is offered to those making between $125,000 and $145,000 (or joint-filing couples making between $225,000 and $245,000).

Please note that no credit is available if the purchase price of the home is more than $800,000.