Home Buyer Tax Credit â€“ The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser’s income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
On November 5, 2009, Congress passed a bill that included an extension and expansion of the home buyer tax credit. The bill would extend the present $8,000 tax credit for first-time home buyers through April 30, 2010. Current homeowners are eligible for a $6,500 Tax Credit through April 30, provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years.
Who Qualifies for the Extended Credit?
- First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
- Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a â€œfirst-time home buyerâ€ the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.