REALTOR®: Guidelines on Home Buyer Tax Credit Released
Wednesday, January 13, 2010
The extension and expansion of the federal home buyer tax credit will help bring the economy to a sustainable recovery, according to local REALTORS®. The tax credit, which will run until April 30 of this year, is now accessible to repeat buyers.
The Silicon Valley Association of REALTORS® shares the following brief outline of updated rules involving the home buyer tax credit:
First-time Home Buyers:
• To qualify as a "first-time home buyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
• The credit is available for a home purchased between November 7, 2009 and April 30, 2010.
• The maximum allowable credit is $8,000.
Current Home Owners:
• 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, may qualify.
• In order for married purchasers to qualify, both individuals must have lived in the same residence for five consecutive years out of the last eight. If one spouse has lived in the house for five years and the other moved in later, after they were married, then they are both excluded from the buyer tax credit.
• The maximum allowable credit for current homeowners is $6,500.
Other Qualifications:
• The credit may be applied to primary residences, including single-family homes, condos, townhomes and co-ops.
• The credit may only be awarded on homes purchased for $800,000 or less.
• Single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum tax credit.
• The credit decreases for single buyers who earn between $125,000 and $145,000 and for buyers who file jointly and earn between $225,000 and $245,000. The amount of the tax credit decreases as their 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.
• As long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
• According to the IRS, in situations in which two unmarried buyers purchase a residence together where one qualifies for the $6,500 repeat buyer credit and the other qualifies for the $8,000 credit, a repeat buyer cannot receive a tax credit higher than $6,500 and the total amount claimed by both buyers cannot exceed $8,000. For example, the repeat home buyer could claim $6,500 and the first-time home buyer could claim $1,500. Alternatively, both buyers could claim a $4,000 tax credit.
For more information on the federal home buyer tax credit, visit www. realtor.org.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.
» Back to Real Estate Articles