The Federal Homebuyer Tax Credit has proven itself to be a valuable tool for the housing industry. The previous plan was set to expire on November 30, 2009, however it was extended to April 30, 2010. In addition, homebuyers who are not considered “first time” buyers can take advantage of a credit as well. Here is a recap on the credit.

A “First Time” buyer is anyone who hasn’t owned a principal residence for the previous three years before the purchase. As a first timer, you’re eligible to receive as much as 10% of the purchase price, up to $8,000.

If you have owned and lived in the same residence for five of the past eight years, you can also qualify for a credit of as much as 10% up to $6,500, of the purchase price on a new home.

You don’t have to pay the money back, and they are dollar for dollar reductions. This means that a taxpayer who doesn’t pay enough tax to offset the credit will get a refund.

As with the old law, you can stake claim on your 2009 or 2010 taxes. Talk with your tax preparer for details on that.

Here’s the kicker, you must have a home under contract by April 30, 2010 and closed by May 31, 2010 to take advantage of the tax credit. Who knows if they are planning on extending this program, so if you are in the market to purchase, now is the time.

Not sure if you meet the criteria for a tax credit? Give me a call or send me an email and I’d be happy to help.

ABOUT THE AUTHOR

Robert Chubb is a full time Realtor and long time Novi resident. He has been selling real estate full time for 6 years and serves the Metro Detroit area. If you have questions or comments, he can be reached at 248-390-0850 or at rob@3dxonline.com.