Last Call for the $8,000 Homebuyer’s Tax Credit

From on April 09, 2010 in Tools and Tips

If you were thinking about cashing in on the homebuyer’s tax credit, the clock is ticking. And don’t let the last extension fool you; this time, they mean business.

In order to qualify for the $8,000 return, you must sign your new home contract by the end of April and close by July 1st. first time homeowners creditHowever, don’t be surprised if it takes a while to actually get your hands on the money. The delay in return disbursement has increased since the credit was first put in place.

Although the money is tempting, we advise you to look before you leap. First things first: make sure you qualify for the credit. If you haven’t owned a home for the past three years, then you’ll either receive the $8,000 or 10% of the original purchase price (whichever is lower). You can also receive a lower credit of up to $6,500 for a trade-in (i.e. you’ve owned a home for the past five years but are looking to move).

However, if you earn more than $125,000 as a single buyer or $225,000 as a couple, or if the new home costs over $800,000, you are ineligible for either credit.

Another point to pay attention to is the area in which you’re looking to buy. If home values are expected to continue falling in that particular state or town, it may not be the wisest investment. After all, law requires you to keep the new home for at least three years.