Did you know that you may qualify for a refundable homebuyer tax credit up to $8,000?
Below I have discussed in detail everything you need to know about the homebuyer credit for your principal residence based on your settlement (closing) date.
History of the Homebuyer Tax Credit
Originally, the first-time homebuyer credit was created with the "Housing Assistance Tax Act of 2008" and provided a refundable credit up to $7,500 for a principal residence purchased on or after April 9, 2008, which HAD to be paid back in most situations ratably over a 15 year period beginning in year 2010. Therefore, this credit was really an interest-free loan!
The law was changed with the "American Recovery and Reinvestment Act of 2009." The refundable first-time homebuyer credit was increased to a maximum of $8,000 for a principal residence purchased on or after January 1, 2009 and did NOT have to be paid back in most situations.
On November 6, 2009, President Obama signed into law the "Worker, Homeownership, and Business Assistance Act of 2009" which EXTENDED the homebuyer credit to June 30, 2010* and EXPANDED who can qualify for the credit. In addition to first-time homebuyers, certain long-term residents may also qualify beginning November 7, 2009. First-time homebuyers still qualify for a refundable credit up to a $8,000 on the purchase of a principal residence. Long-term residents may qualify for a refundable credit up to $6,500 on the purchase of a principal residence.
NOTE: Special rules extend the purchase date of a principal residence to qualified military personnel and certain federal employees who are on official extended duty service outside of the United States.
*If a written binding contract to purchase the principal residence went into effect on or before April 30, 2010, the individual has until June 30, 2010 to settle (close) on the home.
On July 2, 2010, President Obama signed into law the "Homebuyer
Assistance and Improvement Act of 2010" which extends the
settlement date (closing) from June 30, 2010 to September 30,
2010. However, the binding contract to purchase the principal
residence has NOT changed.
The September 30, 2010 settlement date applies ONLY if a
written binding contract to purchase the principal residence
went
into effect on or before April 30, 2010 and settlement was
supposed to take place on or before June 30, 2010.
Qualifications for the Homebuyer Credit
Since the rules to qualify for the homebuyer credit are different based on your settlement (closing) date , select your settlement date below for detailed information on how the homebuyer credit will work for you!
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Select Your Settlement (Closing) Date |
| *If a written binding contract to purchase the principal residence went into effect on or before April 30, 2010 and settlement was supposed to take place on or before June 30, 2010, the individual has until September 30, 2010 to settle (close) on the home. |
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