Homebuyer tax credit deadline Friday
Time is running out to take advantage of the government’s homebuyer tax credits. Homebuyers must have a contract to purchase a home by Friday in order to get a credit of up to $8,000.
The credit has pushed about 900,000 additional buyers into the market, said Lawrence Yun, chief economist for the National Association of Realtors, a trade group. The additional stimulation has helped stabilize home prices, he added.
“It is laying the foundation for more normal housing market conditions,” Yun said, “and helping assure that we have a sustainable economic recovery as homeowners don’t see further destruction of their wealth.”
The government also offered a tax credit to long-time residents who buy a new principal residence – no credits for vacation homes. They’re eligible for a credit of up to $6,500.
To qualify as a first-time homebuyer, you must not have owned a home in the last three years. The tax credit is 10 percent of the purchase price of a home up to a maximum of $8,000. This applies to a single taxpayer or a married couple filing a joint return. Married couples filing separate returns qualify for half that amount. The $8,000 credit applies to sales in 2009 and through the end of April. Homes bought in 2008 also get a tax credit, but the rules are different.
The IRS outlines many different scenarios and how they effect the homebuyer rules at: http://tinyurl.com/opgukl.
To qualify as a long-time resident, you must have owned and used the same home as your principal residence for at least five consecutive years of the eight-year period ending on the date you bought your new home. The maximum credit is $6,500 for a single taxpayer or a married couple filing a joint return, or $3,250 for a married couple filing separate returns.
You must enter into a binding contract to buy a home before May 1 and close before July 1. If you’re building a home, the purchase date is considered to be the date you first occupy the home.
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