The tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence has been extended through April 30, 2010. There is also a new tax credit of up to $6,500 for qualified repeat home buyers.
First-time home buyers purchasing a new construction or resale home are eligible for the 1st time home buyers tax credit. To qualify for this tax credit the settlement must occur on or after January 1, 2009 and on or before April 30, 2010. The date when closing occurs is the important date, not the “contract” date.
A “first-time home buyer” is defined as a buyer who has not owned a principal residence during the 3 year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse.
The 1st time home buyers tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
On the new $6,500 tax credit for repeat homeowners, any move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit. You are qualified for this tax credit if you have owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date of the new home. You do not have to purchase a home that is more expensive than the previous home to qualify for this tax credit.