Few homebuyers and home sellers know the proper name of the legislation that made the first-time homebuyer tax credit program possible, but many thousands of them have saved a tidy sum since it was passed in 2008. The official name of the tax credit extension passed by Congress recently is the Worker, Homeownership and Business Assistance Act of 2009. This piece of legislation has not only extended the period of time that homebuyers can take advantage of the program, it has also been expanded to include qualified repeat homebuyers. The program has provided some much-needed relief for real estate markets and real estate professionals around the country, particularly in those markets hit hard by foreclosures, plummeting home values and very little action on the market. The extension has also expanded the number of people who can take advantage of the program, raised income levels and allowed people other than first-time homebuyers to benefit, among other changes. Here’s a review of the first-time homebuyers tax credit, the extension and the new changes.
People who had not owned a primary residence in the three-year period prior to the purchase of a home still qualify as first-time homebuyers and may take advantage of a tax credit up to $8,000. The credit never has to be repaid, is equal to ten percent of the home’s purchase price up to $8,000 and can only be applied to homes priced $800,000 or less. The program, set to expire in November 2009, now includes homes purchased on or after January 1, 2009, through April 30, 2010. If a home is sold with a binding sales contract signed by April 30, 2010, it will qualify if the purchase is completed by June 30, 2010. Another change involves the income limit for people taking part in the tax credit extension. Initially, people who bought homes on or after January 1, 2009 and on or before November 6, 2009, had to earn $75,000 or less as single taxpayers or $150,000 as a couple filing jointly to qualify. The extension now applies to homes bought after November 6, 2009 and on or before April 30, 2010 and single taxpayers making $125,000 or less and married couples earning $225,000 or less qualify for the program.
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