The tax credit applies to first-time home buyers only. The IRS definition of a first-home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
The tax credit is equal to 10 percent of the home's purchase up to a maximum of $8000. The tax credit does not have to be repaid.
The tax credit applies only to homes priced at $800,000 or less.
The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30th, 2010, a home purchased by June 30th, 2010 will qualify.
For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
For homes that are purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
$6500 Home Buyer Tax Credit for Move-Up Buyers
For many people the most exciting news is there will now be a tax credit for current homeowners. A couple of key points:
The credit is available for homes that go under contract by April 30, 2010 and close by June 30th, 2010.
Current homeowners can claim a $6,500 credit as long as the property they are vacating has been their primary residence for at least five consecutive years out of the last eight years.
Income limits: $125,000 a year for individuals, $225,000 a year for married couples. (these are higher limits than before)
Homes that cost more than $800,000 are not eligible for the credit.
$6500 tax credit is not retroactive. (from the language of the bill: "shall apply to residences purchased after the enactment of this Act.")
