Home buyers interested in taking advantage of the homebuyer's tax credit has until May 1st, 2010. There are two different types of credit resulting from the housing stimulus package, one is for existing homeowner, and the other is for the first time homebuyer.
A first time homebuyer is defined as anyone who hasn’t owned a home in three years. The tax credit is 10% of the purchased price with a maximum credit of $8,000. Buyers have to be 18 years old and not listed as a dependent on anyone’s income tax return.
Existing, or repeat homeowners are defined as anyone who has lived in their home five out of the last eight years. To be eligible for the $6,500 tax credit, escrow has to be closed by June 30, 2010.
For both types of homebuyers, the credit applies to a home with a purchase price under $800,000. For single income tax filing status the maximum adjusted gross income is $125k, and for married filing jointly the maximum adjusted gross income is $225k. The contract has to be signed after November 6, 2009, and on or before April 30.
You don’t need a prior approval, or any special application. The credit can be claimed on your income tax return. The tax credit is not a deduction. It is an offset for the taxes you might have owed the government from the income received in 2009.
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