As previously mentioned, the House passed an extension to the homebuyers tax credit. The Senate passed an extension and President Obama signed it over the weekend.
▪ The credit is available for homes under contract by April 30th, 2010. Closings must be 60 days after the deadline.
▪ Homes that cost more than $800,000 will not be eligible for the credit.
▪ First-time home buyers (not having owned a home in the last three years), can claim an $8,000 credit. Homeowners that have owned their house for the last five years (or more) can claim up to $6,500.
▪ The credit is limited to those with incomes under $125k (individuals) and $225k (married couples filing jointly). These limits are significantly higher than the original tax credit.
▪ The credit will cost taxpayers $10.8 billion, according to Senate Democrats.
Old Homebuyers Credit News
Treasury officials have found over $600 million in potentially fraudulent claims from over 90,000 filers under the existing home buyer tax credit.
According to the IRS, the original home buyer tax credit (in effect from April 8 2008 to January 1 2009), was essentially and interest-free loan. Taxpayers that claimed the credit must pay it back in 1/15th installments starting in 2010.