Fairfax, Loudoun County Virginia -Residential Real Estate Market Blog

$6500 Tax Credit for existing home owners

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Now its time for you to treat yourself with the opportunity to move up to your next dream home! Much of the hype or publicity about first time home buyer has tainted the big secret of $6500 tax credit for an existing home owner. Yup like any other tax credit it comes with its catch/guidelines. As per the federalhousingtaxcredit.com website here are the details about the credit. As always you should seek advise from appropriate professional .

Who is eligible for the tax credit?
Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit. The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. That is, both spouses must qualify as long-time residents, with at least five years of principal residency for each.

Does my new home be higher value than the current home?
Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.

How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.

Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts

What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit, provided the home is purchased for a price less than or equal to $800,000. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.

What is the deadline?
The date of first occupancy must be after November 6, 2009 and on or before April 30, 2010 (or by June 30, 2010, provided a binding sales contract was in force by April 30, 2010).

I am not a U.S. citizen. Can I claim the tax credit?
Perhaps. Anyone who is not a nonresident alien (as defined by the IRS) and who has owned and resided in a principal residence in the United States for at least five consecutive years of the eight years prior to the purchase date can claim the tax credit if they meet the income limits. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $6,500 in income taxes and who receives an $6,500 tax credit would owe nothing to the IRS. While a tax deduction is subtracted from the amount of income that is taxed.

So why wait !! Northern Virginia market has been on your side, inventory is low, first time home buyer credit very attractive and low interest rates work best for both your buy and sell. Call me today to get started at 703-625-4949 or visit me at www.eNOVAHomes.com or email at Info@eNOVAHomes.com