5 Facts About Home Buyer Tax Credit

We all know that the First Time Homebuyer Tax Credit got extended and now includes those who presently own a home, but here are 5 facts that you may not know.

1. Income limits are based on the Adjusted Gross Income

2. Income can exceed $125,000 (single) and $225,000 (married) by $20,000 and still receive a partial credit based on a “MAGI formula” created by the IRS.

3. For New Construction the “date of purchase” is considered the date the Home Buyer occupies the property, not the closing date or the start of construction.

4. When a Home Buyer buys a 2-4 Family residence and occupies one of the units as their personal residence they are only allowed to claim 10% (or max credit “$8,000 for First Time Home Buyer” “$6,500 for move up Home Buyer”) of the unit they occupy, not the entire sales price.

5. Homes purchased on Land Contract can QUALIFY for the tax credit, but must meet the 7 part test.

The eligibility period for the extended tax credit is for homes purchased after November 06, 2009 and before May 01, 2010, with a closing occurring prior to July 01, 2010.

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Related posts from Indiana's USDA Home Loan Expert:

1. Why you Need to Act Now for the Tax Credit
2. Using a USDA Loan to Purchase a Home After a Foreclosure
3. Home Buying Process for a First Time Homebuyer
4. The Tax Man Cometh: As A Homeowner You Can Give A Lot Less
5. What’s a Credit Score Got to Do With It?