Although most of the real estate news seems to focus on the First Time Home Buyer Tax Credit, there has also been a new tax credit that will be signed in that is geared to help existing home owners. The goal behind this bill is to encourage potential buyers who already own a home and have maintained (or paid in full) their mortgage bills steadily for at least five years. These buyers would usually be moving up, or buying a larger or more expensive home.
-Buyers must have owned and lived in their previous home (in other words, as a primary residence) for five years in a row out of the last eight years.
-The amount is 10 percent of the home’s purchase price, with a maximum credit of $6,500.
-The purchase price of the home must be $800,000 or less.
-The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, if a binding sales contract is signed by April 30, 2010, the home purchase qualifies (as long as the closing is completed by June 30, 2010).
-The income for a single taxpayer cannot exceed $125,000. Married couples filing jointly must not have a combined income of more than $225,000.
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