2009-2010 Extended and Expanded Home Buyer Tax Credit Q&A 

What does this new Home Buyers Tax Credit do? 

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.  (To qualify as a “first-time home buyer” purchasers may not have owned a residence during the three years prior to the purchase.)

• 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.

Which properties are eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including single-family homes, condos, townhomes, and co-ops.

How much is available?
The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a buyer's credit amount determined?
Each home buyer’s tax credit is determined by two additional factors:

1.The price of the home.
2.The buyer's income.

Is there a price limitation?
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Is there an income qualification?
Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

If the buyers' income exceeds these limits, Can they Still get a credit?
Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can buyers qualify if the sale closes after April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, buyers will have until July 1, 2010 to close.

Will the tax credit need to be repaid?
No. Buyers do not repay the tax credir if they occupy the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.