Buyers
Buyers, take advantage of the Homebuyer Tax Credit portion of the American Recovery and Reinvestment Act of 2009 EXTENDED
HOMEBUYER TAX CREDIT REVIEW -
What are the important points to know?
* Credit of $8,000 or 10.0% of the purchase price whichever is less
* Credit of $6,500 for Current Homehowners. Must live in current residence 5 consecutive years out of 8
* Repayment not required
* For 1st time home buyer OR buyers who have not owned a home in the last 3 years
* Single person income less than $125,000 a year
* Joint ownership income less than $225,000 a year
* Must purchase (under contract) on or before April 30, 2010 and close no later than July 01, 2010
* Must be primary residence
* Must live in home for 3 years or credit is recaptured at time of sale
* Maximum price of $800,000
Are there restrictions for the home purchased?
* Property can be a condo, single family detached, co-op, townhouse or something similar
* Home must be in the United States
* Cannot be vacation homes or rental properties
* For new construction, the “purchase date” is the date of occupancy so the move in date must be on or before July 01, 2010
Who is not eligible for the credit?
* Those who buy from a close relative ie spouse, parent, grandparent, child or grandchild
* Those who buy vacation homes or rental properties
* Those who stop using home as main residence
* Those who sell home before end of three years
* Those who are nonresident aliens
Other Provisions
* Can use credit if use state/local revenue bond financing
* If purchased before January 01, 2009 credit of $7,500 is subject to recapture
When can credit be claimed?
* 2008 Tax Return or amended 2008 Tax Return for those who purchased prior to January 01, 2009
* 2009 Tax Return
Consult www.federalhousingtaxcredit.com or your tax advisor for more information
BONUS FOR BUYERS OF NEWLY BUILT HOMES IN CALIFORNIA
SUMMARY –
* Must be never occupied newly built home
* Must be principal residence for 2 years
* Must be purchased (closed escrow) between March 01, 2009 and March 01, 2010
* Credit up to $10,000 (5.0% of purchase price or $10,000 whichever is less)
* Credit paid over three years
* Allocated by Franchise Tax Board on first come first served basis
* Allocation of $100 million for program
* No income limitations
* No first time home buyer requirement
*No repayment requirement
PROCEDURES –
* Seller to certify home has never been occupied before close of escrow
* Buyer to declare will live in home as principal residence for 2 years
* Submit form to Franchise Tax Board within 7 calender days after close of escrow
* Franchise Tax Board to send letter to buyer stating eligibility
Consult www.ftb.ca.gov or your tax consultant for more information
