Facts About Tax Credits Available for Home Purchases in 2010

What a great time it is to buy a home – affordability is excellent, interest rates are at all-time lows, inventories are high, builders are offering nice incentives, and Uncle Sam is giving tax credits!

  • The tax credits are available (as the legislation is currently written) for home purchases that go under contract before May 1, 2010.  The transaction must close before July 1, 2010.
  • There are 2 different credits available for individuals who buy a home to be used as a principal single-family residence, subject to the time frames above: the First Time Home Buyer credit, and the Repeat Buyer credit.
  • For a buyer to take advantage of the First Time Home Buyer credit, an individual must not have owned a home for the past three years.  For married joint filers, both must meet this criteria to take the credit on a joint tax return.
  • The First Time Home Buyer credit is equal to 10% of the purchase price of the home, up to a maximum credit of $8,000.
  • For a buyer to take advantage of the Repeat Buyer credit, the buyer(s) must have lived in their current home for five consecutive years of the past eight years.
  • The Repeat Buyer credit is for eligible repeat buyers and the credit is up to an amount of $6500.
  • Homes with a purchase price in excess of $800,000 are ineligible for any tax credit.
  • The tax credit is subtracted from your tax liability for the year.  If your liability is less than the credit you qualify for, you will receive a check for the difference.
  • There are income limits for individuals and married joint filers:  Adjusted gross income of $125,000 for individuals and $225,000 for married joint filers. 
  • The credit is phased down for those earning more than the limits above, and the credit is not available for those with adjusted gross income exceeding $145,000 for individuals and $245,000 for married joint filers. 
  • This credit is not subject to repayment, provided that the buyer(s) do not sell within the first three years after purchase.

Below is a YouTube video about the tax credits put together by Jeff Detwiler, President & COO and Barry Redler, Chief Marketing Officer of Long & Foster Companies:

Now is a great time to start the buying process.  Please contact me and let’s get started!


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