First Time Home Buyer Tax Credit Extension

Good news- New legislation to extend the Homebuyer Tax Credit though April 2010 was approved, along with expansions that could provide up to $6,500 to pre-existing homeowners.

"We're looking at this as a very positive thing that will continue to spur sales," said Al Suguitan, president and chief operating officer of the Greater Gateway Association of Realtors. "I just returned from the convention for the National Association of Realtors, and people need to know that there will probably not be an extension beyond this date."

The Official overview on the First Time Home Buyer credit: For those who need it, here's an overview of the First time Home Buyer Credit.

- Applies only to homes used as a taxpayer's principal residence.
- Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
- Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

How much? The credit is 10% of the purchase price of the home for a maximum amount of $8,000 for 2009 ($7,500 for 2008).

You don't have to be a "Property Virgin"- For the purpose of this legislation, a "First Time Home Buyer" is someone who hasn't owned a principal residence for three years before buying a house this year.

I'm interested, Sign me up! Claim the credit with IRS Form 5405 and file it with your 2008 or 2009 federal income tax return.

The Catch:

- If you income exceeds the phase-out range. $95,000 or $170,000 filing jointly.
- You buy the home from a close relative (spouse, parent, grandparent, child, grandchild)
- You're a non resident alien
- You sell your home before the year ends
- You are (or were) eligible for the District of Columbia first-time home buyer credit for any taxable year.
- You owned a home any time during the three years prior to purchasing the new home

Remember you are not required to apply for this credit if you purchase a new home.