Last November, the government expanded and extended the new Homebuyers Tax
Credit. According to the program, first-time homebuyers are eligible for a tax
credit of up to 10% of the purchase price of the home, with a maximum credit of
$8,000. And current homeowners are eligible for up to $6,500.
Although military personnel may qualify for a special extension, the vast
majority of homeowners must have contracts in effect no later than April 30,
2010 and must close no later than June 30, 2010 to qualify for the credit.
This means that homebuyers now have less than one week to get
their paperwork going to qualify for this credit, before it goes
Here are some important details about this tax credit.
The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather
than a "tax deduction" or reduction in tax liability that would only reduce
$1,000 to $1,500 when all was said and done.
So, if a first-time homebuyer who qualified for the entire benefit were to
owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she
would owe nothing.
Even Better... It's Refundable!
Remember, because it's a tax credit, it's refundable! That means a homebuyer
can receive a check for the credit if he or she has little or no income tax
For example, if a first-time homebuyer is eligible for a tax credit of $8,000
but is liable for $4,000 in income tax, she can still receive a check for the
What are the Income Caps?
Single tax filers with incomes up to $125,000 are eligible for the total
credit amount. Those who earn more than this cap can receive a partial credit.
However, single filers with incomes of $145,000 and above are ineligible.
Joint filers with incomes up to $225,000 are eligible for the total credit
amount. Those who earn more than this cap can receive a partial credit. However,
joint filers with incomes of $245,000 and above are ineligible.
What's the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sales price of
If you or someone you know is in the process of purchasing a
home, this is an important week to take action - feel free to forward this
article to anyone who it might benefit. And give me a call at 626-629-8439 with any questions -
the clock is ticking and the deadline is Friday!!
Real Estate Team
Pasadena Real Estate Agents