Dallas Home Buyer Tax Credit Extended to June 2010

November 17, 2009 by · Leave a Comment 

NAR - Home Buyer Tax Credit

NAR - Home Buyer Tax Credit

If you didn’t make the Nov 30th, 2009 tax credit deadline, you are in luck!  Whether you are a first time home buyer or repeat buyer, you may qualify for a tax credit up to $8,000 on a home in Dallas.  The Business Assistance Act of 2009 extended the tax credit for 1st time home buyers up to $8,000 for home purchase transactions completed by June 30th, 2009.  The Business Act also established a tax credit up to $6,500 for existing home owners that plan on selling their current primary residence and buying another home.  Home buyers looking to take advantage of the Existing Home Owner tax credit must have lived in their current residence for five consecutive years of the eight years prior to the purchase date. 

Here is a brief summary of  the Home Buyer Tax Credit New Legislation:

New Legislation Changes: (visit irs.gov for updates)

  • Extends deadlines for purchasing and closing on a home.
  • Authorizes the credit for long-time homeowners buying a replacement principal residence.
  • Raises the income limitations for homeowners claiming the credit.  ption of claiming the credit on either their 2009 or 2010 return.  

For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived  in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.

People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-outs of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009.

Several new restrictions apply to homes purchased after Nov. 6, 2009:

  • Purchasers must attach a properly executed settlement statement to their return.
  • No credit is available if the purchase price of the home exceeds $800,000.
  • The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.
  • A dependent is not eligible for the credit.
  • The new law gives the IRS broader authority to deny first-time homebuyer credit claims, without having to first audit a taxpayer’s return. Known as math error authority, this authority applies, retroactively, to credits claimed on original and amended 2008 returns, as well as to claims yet to be filed.

Who Qualifies for the Extended Credit? (for more info visit realtor.org)

  • First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
  • Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

 Which Properties Are Eligible?

 The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

  • The maximum allowable credit for first-time home buyers is $8,000.
  • The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

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

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

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

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. 

If you are in the market to buy a home in Dallas, contact DFW Urban Realty and ask one of our Dallas real estate agents how you can take advantage of the New Extended Home Buyer Tax Credit.  The new home buyer tax credit can be used with homes, new homes, townhomes, condos, lofts, and highrises.

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