3/10/10
Less Than 60 Days Left for $8,000 Tax Credit
The temporary $8,000 home buyer tax credit offered to people purchasing a new residence is set to expire on April 30. The program applies to both first time home buyers and to individuals who have resided in their home for at least 5 of the last 8 years.
To qualify for the program you must purchase a principal residence (not an investment or rental home, or a second home) by April 30. There is an additional requirement that the escrow close no later than June 30th. This second deadline was added to provide an orderly sunset to the program. The original plan expired November 30, 2009 with no cushion built in to actually close escrow.
The tax credit is $8,000 (or 10% of the sales price, whichever is lower) for anyone who has not owned a principal residence within the previous 36 months.
The tax credit is $6,500 for those who have lived in their current residence for 5 consecutive years during the last 8. You do not have to sell your current residence in order to qualify for this “move up” section of the program. You just have to move into the new property as your primary residence.
The credit will reduce your taxes owed or increase the amount of your tax refund dollar for dollar. The best part is that “tax credit” means you get the full credit even if you owe no taxes.
An important distinction is that this is an IRS program – it has nothing to do with loan programs or lending guidelines. I strongly recommend you speak with your CPA if you have specific qualifying questions as they are the only ones with the expertise to do so.
Please call with any questions you may have 800 429-RATE (7283)
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