$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 PURCHASED A VACATION HOME IN JUNE 2009. DO I QUALIFY FOR THE $6500 TAX CREDIT? H J WEINSHEIMER
Is there a new 5405 form available for the $6500 tax credit, or due we
modify the old form by changing $8,000 to$6500. I qualify and need to file as soon as possible ???
My husband and I owned our home until the end of Oct losing it to a bankrupcy. We were in the home for approx 14 years before we lost it. We are in the middle of a land contract with somebody and are planning on
purchasing the home ourselves as soon as we can pay off taxes still ownrd by our business. If we purchase the home bofore the deadline we we qualify for the $6500 tax credit?
Will I qualify for 6500.00 rebate? Bought our first house in 2001 and sold it in oct. 2007. Rented while waiing to build. Construction loan began on May 1, 2009 and converted to 20 yr mortgage on Dec. 1, 2009 with first payment due on Jan 1, 2010.
My now husband, then boyfriend moved in with me in December of 2003 but I didn’t add him to the title of our home until we were married in September of 2005. Will we qualify for the $6,500 repeat homebuyer credit if we purchase a new home by April 30th?
Also, same question as Ted, are you required to sell your current home, or can that become a rental property?
We are interested in purchasing a home on the block we already reside.
Eventually we hope my mom will live there right not she lives in Chgo.
Do I qualify for the rebate above. Also what is an LLC and would I benefit purchasing that way with my mom’s name on that
I am an existing homeowner and have lived in it for 15 years with my spouse. I also own another home that my son lives in and it was purchased 11/10/2007. Do I qualify for the $6500 tax credit??
I husband and I are separated and have filed for divorce. It will not be final until mid-April. We owned our home together from Jan 04 – Dec 09. When we sold it, he bought a new house and filed for the $6500 credit. I am staying in an apartment temporarily but have a contract on a house. I will likely close at the end of February. Will I have any problems filing for the $6500 tax credit?
Good run down in article but the comments really help flush out the subject fully so something for anyone here. Thanks for the post! I will link to this to help our customers.
My husband and I lived in a home from 1998-2007. We sold it and bought another home and have lived here for 3 years. We are about to purchase another home and rent our current home. Would we be available for the $6500 credit?
I am interested in the $6500 made available to any homeowner buying a house. I have read numerous articles but still have a couple of questions. Questions: Can it be used for a second home? How is the money applied or made available to you. I read that it could be added to one’s down payment. However my real estate person thinks that it is only taken off of one’s Income Tax. Please clarify for me if you would be so kind.
IS THEY ANY WAY TO BE ELIGIBLE IF A HOME WAS PURCHASED SEPT 2008…WE PURCHASED A NEW HOME THEN AFTER LIVING IN AN OLDER HOME FOR 6 YEARS???
My husband and I purchased a new home in Aug 2009. Do we qualify for the new $6500.00 credit? Will we need to amend our 2008 taxes?
my wife and i got married in 08, my wife has owned the home for more than five years, i moved in with her in january of 05, so i have lived there for just over five years now, we sold our house this month and we just agreed to buy a house today and both will close april 1st, do we qualify for the tax credit, the house in in her name and how do we prove that i have lived there for five years
If we close on a home March 1, 2010, do we count that on our 2009 taxes or wait til we file 2010 taxes next year?
@Ted
@andy
My dad, 68, has lived in his condo for 20 years. He is retired and pays no income taxes. If he purchases a new home will he qualify for the $6,500 tax credit?
My wife and I purchased a home in April of 2009, this is our second home. We had a home that we purchased back in 1996 in Washington state and had to sell in 2008 when we moved to Colorado. My question is are we eligible for the $6,500.00 tax credit for second time home buyers?
Hi,
I could really use the 6500 credit. I bought my home in 12/2006. previous to that I have owned real estate since 1992. I guess there is no way to get around the 5 year rule? my realtor kept telling me I am eligble. Seems he is wrong?
thanks Sandra
Here’s a twist I can’t seem to find the answer. I own a different home, a moble home where I pay a lot rent, in-between my 5-year home and my new home, all within the last 8 years. And I still co-owner of the first home. I don’t see anything that says the 5-year home has to be the most recent house. I can’t decide if I should quailify?
My husband and I got married October 2009. Both of us own houses that we have each had as our principal residence for the last 6 years. We are selling both houses and buying a new house. Do we qualify for the repeat buyer tax credit?
We sold our home of 26 years in 07/09. We got a construction loan in October to build a home. We don’t officially take possession of the house until 03/10. The construction loan will be converted to a mortgage loan at that time. Would we qualify? The construction loan was in October, but we don’t actually buy the finished home until March!
We have been in our current home for 3 years and have owned different houses for the past 10 years. Do we qualify for the 6500?
Hi,
Does the $6,500 tax credit have to be applied for prior to closing or can it be obtained after closing on the property? My daughter purchased their 1st home in March 2003 and they lived until they sold the property in September 2008, they lived with us for 17 months while looking for a new home, they closed on their new 2nd home on Jan. 25, 2010. Do they qualify for the $6,500 tax credit? Thanks, Vicki Calderon
Have been in current home for 7 years. Looking to buy a 2nd home in another state very soon.
Q: Does the 2nd home HAVE to be our primary residence ?
Q: When would we have to close by, to receive the $6500 tax credit.
I previously owned a home from 2000 and sold it 6-4-07. I have been living in a house my son owns and have rented from him since 7-1-07. I have now purchased a new home and will take possession of it 4-17-2010. Do I qualify for either the new home $8,000 or the $6,5000 tax refund or credit?
My husband and I purchased a home in October 2004 which has been our primary residence for all of that time. Do we qualify for any of these programs?
I have owned a couple of homes in the past, but sold the last one before I married in 2009. We have been renting for the past year, but are looking to buy our first home. Can we get any of the tax credits available?
FHA down payment is 3.5%. How does a buyer apply the tax credit to the down payment. I have never heard this being able to be done.
I bought a house in september 2009 it is my second house , am I eligable for the 6500 stimulas or not.
thank you
We sold our home in September 2008 after living in it for 12 years, we have been house-sitting for the past 18 months and are getting ready to close on a new home. Our closing date is scheduled for April 2010. I keep getting conflicting stories on whether we are eligible for the $6500 tax credit? Can you tell me if we are eligible?
Here is the scenario: Married Couple Husband has never owned a home, so if he were single he could get the 1st time homebuyer credit. Wife has owned a home for ten years with her previous husband, so she would qualify for the Move-Up/Repeat home buyer credit if she were single. They are buting a home with closing date of April 9, 2010. Together they do not qualify for the 1st time homebuyer credit because of her. Do they qualify for the Move-Up/Repeat homebuyer credit or do they get disqualified because of him?
My wife and I sold our home last July and had a home built. The construction loan was paid off by a mortgage in January 2010. Do we qualify for the repeat homebuyer tax credit? We qualify under all the other parts (income level, owned for past 5 years, etc.)
What is the “purchase price” of the newly constructed home? The mortgage price? The construction loan value?
We closed on our new home in the end of September 2009 and moved in at the end of October 2009. We borrowd money for the down payment of the new home with intention of paying it back when we sell old house. We will be selling our old home (that we owned for 7 years) in mid April 2010 – We were married but the old home only had name of wife on deed. The new home has both spouses’ names on deed. Is there anything that we can qualify for, (can this be considered 1st time homeowner for husband, or can repayment of down payment for new home be considered similar to a closing) or are we out of luck on all ends? Would it help to do a refinance now?
We are currently waiting on bids to build a owner-occupied duplex on a lot that we will be purchasing.
Will we qualify for the $6500 rebate (we sold our home in Dec 09)and had lived in that home for close to 15 years? What dates do we need to watch in regard to construction and occupancy?
thank you
Joan
Lived in the 1st house from 6/89 to 8/08, turn in as a rental and moved to 2nd house. Now buying another house. Will move in when escrow closed on 4/22/10. Can I claim $6500 credit? because 1st house is still renting and I’d lived there 5 out of last 8yrs. Thank you.
Ken
We purchased a home from a sheriff sale in September. The house needed some remodeling and we completed that and moved into the house on December 22, 2009. Would the remodeling of a new house equate into building a new house, and the occupancy date would be used to determine the purchase date?
Thanks
Larry
We qualify for the $6,500 tax incentive and will be completing construction of our home within the next few weeks. Because the home is being built without debt, what forms do we need to submit with our 2009 1040 to claim the credit? Thanks. Susan
I bought my home in 2004 and lived in it until Oct 19th, 2010 when I was forced to sell my home and downsize to a condo because of disability income status. Do i qualify for the $6500 tax credit. I had called my tax lady several times in Dec and the gov. website and forms never were made available until the end of January 2010 with the date Nov 6th – May 10. Does that mean that i miss out because of 19 days when i would have waited to close if the public were told this information up front. All we were told was that they were going to pass a tax credit for 6500 so i decided it was time to move before i went into foreclosure and i would get this 6500 credit since i am on disability and have a low income.
How can we go about requesting that the repeat homebuyers credit should include purchases in 2009 period, not just 12/1/2009? It seems to be so unfair to those whom were able to purchase and close. It took 5 months to close on my home, and with all the cross checking, this would have been a nice gift back for all that red tape . . . .
Closing should be Oct 19th, 2009 (not 2010) on my above post #89
have owned our home in Maine since 1996 but have lived in Florida for 5 years and rented the Maine home. buying in Colorado now. do we qualify for the $6500 credit on the basis of the Maine residence?
If someone owned a home from 1998 -2008, and lived in it during those ten consecutive years, do they now qualify for the $6500 repeat home buyer stimulus money even though that home was sold in 2008? What is unclear to me is this: I want to buy a new property and have found something I would like to get in contract by the determined deadline of April 30th and I can close well before the June 30th deadline. I have not owned anything since selling my former home that I owned and lived in 10years, which was a regular sales transaction that was recorded in 2008. Am I still elligible for this stimulus help if I buy now even though i do not current own this home anymore?
we jjust sold our house we have livd in f9r 5 yrs-under contract now. Howdo wee apply f9r the $6500 tax credit.
Our realtors have no answetrs so please help- mu hsband has been unemployed for 3 yrs & this money would mean a lot to us. thank you, judy
Hi , I lost my house to a storm two years ago. I signed a contract to rebuild at the same site. The house will be done in about four weeks, can I get the tax credit of 6500, it is at the same address, but I have a new mortage as well. and new house. Thanks
Can I get the seond home buyers tax credit for the purchase of a boat that meets the second home qualifications for tax edcutions on loan interest?
divorce is final, owned a home with ex for 6 years, have a binding contract for a condo…am I eligible for the 6500.00 stimulus? thank you..
I here that the 2nd time credit is exstended to June 2011 for veterens.Is that true?
My ex and I owned a house from 1/2001 until 5/2006. Howevever, we separated and I went to rent an apartment in 12/2005. I just bought a house in 3/2010. Because I owned the former house from 3/2001 to 3/2006 (5 consecutive years within the timeframe of the 8 years from my current date of purchase), and was still legally married (but separated), do I quality?
I am getting divorced and must refinance our marital home in my name only. Do I qualify for the $6500 rebate?