We are into the third version of homebuyer’s tax credit in the last two years. The current – and perhaps last – version expires soon. Don’t lose the opportunity to qualify for a homebuyers’ tax credit because you may be confused – read on!
Who Qualifies for the Tax Credit?
- First-time homebuyers who are under contract to purchase homes by April 30, 2010. 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.
- Current homeowners who are under contract to purchase another home by April 30, 2010, if they have used their prior home as a principal residence for five consecutive years within the last eight. (You don't need to sell your current home to qualify for the tax credit.)
Which Properties Are Eligible?
Any home that will be your primary residence, including: single-family homes, condos, townhomes, manufactured homes (that are affixed to land) and co-ops (none of those in Flagstaff).
How Much Is the Tax Credit?
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 two additional factors:
- The price of the home: The home purchased must be for $800,000 or less.
- The buyer's income: Single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer 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?
As long as a written binding contract to purchase is in effect on April 30, 2010, you 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, so long as he/she occupies the home for three years or more.
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Ready to buy a Flagstaff home? Contact me: Ann Heitland, RE/MAX Peak Properties. | 
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