The extension and expansion of the home-buyer tax credit became law when President Obama signed the bill the morning of 11-6-09. Since January of this year first time home-buyers have been taking advantage of the $8000 tax credit. Now, with the bill expansion, buyers who have owned their existing homes five years or more are eligible for tax credits of up to $6500.  The $8000 tax credit is still available to a first time buyer or a buyer who has not owned a home in the last three years. In order to qualify for either tax credit, buyers must sign a contract to purchase a home by 4-30-10 and close by 6-30-10. The selling price of the home may not exceed $800,000. 

As part of the expansion, the bill increases the income ceiling for buyers. Now, an individual may earn up to $125,000 and joint tax filers may earn up to $225,000. This is an increase from $75,000 and $150,000, respectively. The tax credit is for the purchase of owner occupied primary homes only. Vacation properties are excluded. The expansion also helps military home buyers. If a member of the military has served outside the USA for at least 90 days, the tax credit is extended an additional year, until 6-30-11. This is the least we can do for those serving our country.

Georgia’s own Senator Johnny Isakson has commended Congress for passing this legislation and has said the bill is key to our nation’s growth and stability. A press release issued in Washington on behalf of Senator Isakson stated “for purchases made in 2010, taxpayers would be able to claim the credit on their 2009 tax return. Home buyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date. However, this recapture provision would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on qualified official extended duty. The amendment also includes anti-fraud language that gives the IRS the authority to do greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires the taxpayer claiming the credit to be 18 or older, and requires a HUD-1 settlement statement to be attached when claiming the credit.”

Post contributed by Rena Rogers with Pine State Mortgage Corp.

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