• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

1. The price of the home.
2. The buyer’s income

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

For a detailed explanation of the Tax Credit:

http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

-First-time homebuyers (defined as buyers who have not owned a home in the last three years) are eligible for a tax credit of up to $8,000. New to the package is an incentive for existing homeowners who’ve been at their current residence for at least five years. They will now be eligible for a credit of up to $6,500.

-The income limit has been increased. Previously, a single taxpayer could not have a modified adjusted gross income (MAGI) above $75,000 to claim the full credit, and up to $90,000 for a partial credit. Those limits have been raised considerably to $125,00 and $145,000, respectively. In addition, married couples can now qualify with a MAGI of between $225,000 and $245,000.

-Eligibility for the new program is for homes purchased after Nov. 6, 2009 and before May 1, 2010. However, home purchases subject to a binding sales contract by April 30, 2010 will still qualify provided that the closing occurs prior to July 1, 2010.

Proponents are hopeful that the extension will help the real estate market continue its recent surge in momentum. Moody’s estimates that the program will have helped trigger an additional 400,000 sales from its inception in February 2009 through the end of November. If you have any questions regarding the new tax credit, please feel free to contact me.