Congress Extends Tax Credits to Current & Future Homeowners

Congress has extended the First-Time Home Buyer Tax Credit of up to $8,000 for buyers who enter into contract (vs. close escrow) before April 30, 2010. To qualify, the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

The bill also grants Current Home Owners Tax Credit of up to $6,500 for purchasing a new or existing home as long as they have used their home being sold or vacated as a principal residence for five consecutive years within the last eight.

The property and income limitations are as follows: the maximum credit may only be awarded on homes purchased for $800,000 or less and to married couples with incomes up to $225,000 ($125,000 for single buyers). The amount of the tax credit decreases as his/her income approaches the maximum limit. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. If the property is sold within three years, the full amount of the credit will be recouped on the sale.

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