$6500 and $8000 New and Repeat Home buyer Tax Credit
Congress has extended the popular $8000 tax credit and opted to begin a new $6500 tax credit for home buyers who already own a new home. Here are all the details regarding who qualifies and who doesn’t.
The $8000 new home buyer credit
First time home buyers will be eligible for up to $8000 in the form of a refundable tax credit. Just as before, the tax credit scales 10% of the homes value, up to $8000. To qualify, home buyers must not have owned a home for the previous three years.
The $6500 Repeat Home buyer Tax Credit
The $6500 home buyer tax credit is a new addition to the original plan. The $6500 credit scales 10% of the value of the home. Home buyers must have lived in their homes for at least 5 years to claim the tax credit. The new provision will not take effect until December 1, 2009.
When do the Home buyer Tax Credits End?
The home buyer tax credits will both expire on April 30, 2010. However, those who are under contract before April 30 will be able to qualify as long as the sale is completed within 60 days. Though Congress has been quick to extend this program in the past, this will be the third generation tax credit and congressional support is waning. Very few congressmen expect that a fourth generation home buyer tax credit will be made available, so take advantage while you can.
Income limits
The tax credit is only available for single filers who make $125,000 or less, and $225,000 or less for married couples. Homes that are sold for a market price of $800,000 or above will not qualify for the tax credit, so it is unlikely that high priced real estate will see any sudden bump in demand due to the new program. $8000, or 1% is hardly incentive to get high net-worth home buyers shopping. There may be some increase however slight, as the income limits have been upped from $75,000 and $150,000 for single filers and married couples respectively.
FHA Down Payment
Just like the last program, the home buyer tax credit can be used on the down payment on a home, giving cash strapped home buyers the ability to make a hefty down payment on a new home without breaking the bank. FHA loans require a minimum down payment of 3%, so most home buyers should be able to make the minimum by simply applying the home buyer tax credit as a down payment.
Want to know anything else?
Have any questions? Leave a comment below and I’ll expand this article with a Q and A!
I would love to hear the answer to this! I am in same situation – good luck – but I did go ahead and submit mine in hopes that it will go through
we closed on our multi family home in june 23 2005 (were in aggrement april 2005) 5years ago. We are building a home and are in agreement as of 4/29/2010 and are to close on a construction loan June 29th 2010. Would we qualify for the $6500 tax credit, (we are not selling our 2 family just renting it). thanks!
Got divorced early in 2010-bought a different home before 4/30/10.
Want to get my $6500.00 credit soon, but did not think I could file an amendment for 2009 as we filed jointly then, and my ex has not purchased a different home.
If I amend 2009, the check would come in both names and my ex would not qualify for the credit.
Do I have to wait until I file my 2010 return ro get the money?
Got divorced early in 2010-bought a different home before 4/30/10.
Want to get my $6500.00 credit soon, but did not think I could file an amendment for 2009 as we filed jointly then, and my ex has not purchased a different home.
If I amend 2009, the check would come in both names and my ex would not qualify for the credit.
Do I have to wait until I file my 2010 return to get the money?
Will we qualify for 6500 tax credit? We have lived in our current house since 2000 and are building a new home now and will be keeping our current one as well. We also meet the income requirements.
We don’t have one contractor however, but many are doing different aspects of the new house. We have the driveway in and well drilled and will be doing foundation work in June 2010 with hopes of the house finishing by the end of the year. What else would be need to “prove” we are elligible with all of the private, individual contractors we will have by the time the house is done?
My husband and I owned a home together for 5 years. After being separated 1 1/2 years we divorced in February 2010 and in March 2010 I purchased a home for myself. The previously owned home sold before I purchased mine. Can I get the first time buyer or repeat buyer credit and do I have to share since I was divorced at the time of my purchase.
my daughter had owned her condo & lived in it for 5 1/2 years and sold it in April 2010. her husband of 1 1/2 years has owned an income property for 5 years plus which he has never lived in. they have bought a primary residence together & moved in after selling her condo. could they have qualified for at least one of the home credits? she was a long time owner of her condo and he is a first time buyer of a primary residence. they have bought the new house together.
My tax advisor told me that the state of Missouri can take a part of the tax credit. We now owe Missouri over $300 just because we qualify for the $6500 tax credit! Is this accurate?
I started building a new home in Oct 2009, should be in by the end of June 2010. I sold my former home in August of 2009. Am I eligable for the $6500 rebate?
I sold a mobile home that I’d lived in for over five years. I purchased a new home October 2009, filed a 2008 amended return Nov. 3, 2009. IRS disallowed the first time homebuyer credit ($8,000). Do I qualify for the $6,500 credit, if so what is my next step?
Has any extention been added to the First time Home Buyer tax credit. We signed a contract May 4, 2010. WE occupied the residence with in the 60 day deadline.
My husband and I have lived in our present home for 12 years now.
We are in the process of having a rental home built in a resort area.
After reading up on the laws of a “second home” %6500 tax credit, is it true that if we do not live in the home, but rent is out, we are not
eligible for this $6500.00 tax credit. We will be claiming all rental
income and treat it as part of our business.
I thought I heard something about another extended Tax Credit that would end at the end of September 2010. My daughter and son-in-law owned a house and sold it in Oct. 2009 but had to rent (unable to find another house) and just closed 9/9/10 on a house that they had built. I wonder if there is a Tax Credit they would qualify for.
@Elmer Lane
When I filed my income tax return, I filed for the $6500.00 stimulus, I have lived in my home over 18 yrs. I received a letter requesting more proof of ownership, we sent the letter requesting the required proof of residency, a copy of the original deed, history of electric bills for the property,five years of tax returns showing the property address, they seperated everything from their letter of request, and re-figured my tax returns for all the five years, that were sent just as proof of residency. This has turned into a real mess. Not sure where to go with it now.
Question about the repeat home buyers tax credit. I owned a home for the last 20 years and sold it in Spet. 2009. I bought a new home in June 2010. My old home was in my name and I was married in Oct. 2007. My wife did not own a home prior to our marriage. My wife lived in my previous home but did not own it, my name was the only one on the deed and the hud sales form. I bought the new home and only my name is on the new hud form when we bought the new home but her name is on the deed. Are we eligable for the repeat or new home buyer’s tac credit. Thank you.
If my cousin bought a house and 2 yrs later rented it out would she be able to qualify for a loan modification under senate bill 94?
@Debra Call
we bought oct. 2008…got $7500 in 2009, will we have to pay it back?
I was married and owned a home with my wife for 5+ years and we sold the home when we seperated in Nov 09. After our divorce was final, I purchased a home in March or 2010. I purchased the home from my parents for fair market value…do I qualify for either “direction” of the $6500 tax credit (ie owning a home for 5 out of 8 years before buying a new home even though there were a few months in between OR the fact that I purchased a home in March?) From what I understand, buying a home from a relative may disqualify me…but, are there exceptions to the rule if purchased at fair market value? Any help would be appreciated. Thanks!
My ex husband and I separated this year, divorce to be final in March. He had to donate our house to me (which was only in his name – he bought it before we married) so that I could refinance it in my name only. We lived in it for 12 years. Do I qualify for any type of credit?
we torn down our old house and built a new one on the same lot using our
old foundation do we apply for the $6500.00?