First time buyers, who are defined as those who have not owned a primary residence for the last 3 years, have a tax credit of 10% of the new home's selling price, not to exceed eight thousand dollars. Also, those who are currently home owners and who have lived in their primary home for at least five consecutive years of the last eight years, can obtain a tax credit of 10%, not to exceed six thousand five hundred dollars.
These tax credits are available only on homes that are bought for eight hundred thousand dollars or less. The full amount of this tax credit is available to purchasers who earn up to one hundred twenty-five thousand per year. Couples who are married and who file jointly, have a joint earning cap of two hundred twenty-five thousand. A portion of the tax credit is available to purchasers who earn from one hundred twenty-five thousand and one hundred forty-five thousand per year, while for married couples the amount can be from two hundred twenty-five thousand to two hundred forty-five thousand.
These tax credits are equal to a dollar amount reduction in the amount of tax the purchaser owes. If the purchaser stays in the home for at least 3 years, the tax credit does not have to be paid back.
The tax credits are available until April 30, 2010 as long as a written, binding purchase contract is in effect as of that date. This is a fantastic offer by the Federal Government to help you purchase your next home which may never come around again.
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