After much speculation, anticipation, deliberation, and more than a few premature declarations, the home buyer tax credit has officially been re-upped. Again.
First introduced in July of 2008 with the Housing and Economic Recovery Act of 2008, the home buyer tax credit initially acted like an interest-free loan of up to $7500.
Next, in February of 2009, a new and improved home buyer tax credit was born under the American Recovery and Investment Act of 2009. The credit was bumped up to a max of $8,000 and no longer had to be repaid. First time buyers were treated to a gift, err, tax credit equal to 10% of the purchase price on homes purchased after January 1, 2009 and before before December 1, 2009.
On November 6, 2009, The Big O signed The Worker, Homeownership, and Business Assistance Act of 2009 into law and the home buyer tax credit has once again been reborn.
This new version of the home buyer tax credit is bigger and badder than ever. Here are a few key points:
- First time buyers (haven’t owned a primary residence for 3 years prior to purchase) may be eligible for a tax credit of 10% of the purchase price, up to $8,000.
- “Move up buyers” (have used their existing home consecutively for 5 of the last 8 years prior to purchase) may be eligible for a tax credit of 10% of the purchase price, up to $6500.
- Maximum purchase price is now $800,000.
- Tax credit applies to purchases under contract by April 30, 2010 and closed escrow by July 2010.
- Maximum income limits are $125,000 for single and $225,000 for married tax payers.
I’m just highlighting some relevant points here, this list is not meant to be exhaustive. Keep in mind the home buyer tax credit is only one part of an Unemployment Bill. Yes, unemployment.
Here are some other resources you might want to check out to learn more about the home buyer tax credit:
White House Fact Sheet: The Worker, Homeownership, and Business Assistance Act of 2009
National Association of REALTORS Home Buyer Tax Credit Change Sheet
National Association of Home Builders Home Buyer Tax Credit Site (great resource so far, hopefully will be updated soon to reflect new changes)
And of course, please realize that I’m not a tax guy. Check with a tax expert for advice.
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Does this tax credit apply to foreclosures? I got an email about a new foreclosure search tool, http://www.foreclosuregrove.com, and I was curious if I should look into foreclosures since they seem pretty cheap. Thanks!
Hi Francis,
Yes, foreclosures count!
You can find foreclosures currently listed in our MLS with our home search Here’s a direct link to foreclosures in Bullhead City
There is also a specific program called Your Way Home Arizona for foreclosure purchases. The state offers qualified buyers a 22% deferred second with no payments and no interest. It’s even forgivable after a certain period of time.
Any questions, just shout.
Can I get the tax credit when using FHA loan on a recently foreclosed home that was bought at trustee sale and fixed? I’m finding it hard working with the seller because of ’seasoning?…