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Homebuyer Tax Credit
First-Time Buyer
Effective as of 01/01/2009
Amount of Credit : $8,000 ($4,000 married filing separate).
Eligibility: May not have had an interest in a principal residence for 3 years prior to purchase.
Termination of Credit: Purchases after April 30, 2010
Binding Contract Rule: So long as a written binding contract to purchase is in effect on April 30, 2010,
the purchaser will have until July 1, 2010 to close.
Income Limits: $125,000 for a single person, $225,000 for a married couple
Limit on Cost of Purchased Home: $800,000
Purchase by a Dependent: Ineligible
Anti-Fraud Rule: As of 11/07/09, Purchaser must attach documentation of purchase to tax return.
Current Homeowner
Effective as of 11/07/2009
Amount of Credit: $6,500 ($3,250 married filing separate).
Eligibility: Must have used the home sold or being sold as a principal
residence consecutively for 5 of the previous 8 years.
Termination of Credit: Purchases after April 30, 2010
Binding Contract Rule: So long as a written binding contract to purchase is in effect on April 30, 2010,
the purchaser will have until July 1, 2010 to close.
Income Limits: $125,000 for a single person, $225,000 for a married couple
Limitation on Cost of Purchased Home: $800,000
Purchase by a Dependent: Ineligible
Anti-Fraud Rule: Purchaser must attach documentation of purchase to tax return.
Frequently Asked Questions about the Homebuyer Tax Credit
• Question: Existing homeowner credit: Must the new house cost more than the old house?
Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all the eligibility requirements will qualify for the $6500 credit.
• Question: I am an eligible homeowner. I have a fair amount of equity in my home. I have found a home with a non-negotiable price of $825,000. Will I be able to use any of the $6500 tax credit?
Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.
• Question: I have owned my home for 11 years, but sold it two years ago and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility requirements?
Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, say John and his wife bought a home in 2000 and lived there until 2008, when they got divorced. Whether John has been renting or bought in the interim, he would be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years.
• Question: I am an eligible first-time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?
Answer: You do not have to close before December 1. Since the legislation has been signed, it is as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.
If you have any questions or would like additional information regarding the homebuyer tax credit, please contact our office at 570-476-2420.
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The data relating to real estate for sale on this web site includes listings held by MLS-IDX Participants of the Internet Data Exchange program of the Multiple Listing Service of the Pocono Mountains Association of Realtors®. Listings marked with the Internet Data Exchange logo are not necessarily the listings of the owner of this web site. All listing data is the copyrighted property of the aforesaid Association and its MLS-IDX Participants with all rights reserved. The information contained herein is believed to be accurate, but no warranty as such is expressed or implied. 
