Chortek and Gottschalk - Home-Buyer Tax Credits Expand

You no longer have to be a first-time homebuyer to take advantage of the tax credit for buying a new home! New legislation passed in November provides a $6,500 tax credit to current homeowners who purchase a replacement principal residence prior to April 30, 2010, and who close on the purchase prior to June 30, 2010. To qualify for the credit, taxpayers must have lived in the same principal residence for a consecutive five year period looking back over the past eight years.

The new law also extends the $8,000 credit for first-time homebuyers (which also includes anybody who has not owned a home for the prior three years) to April 30, 2010. For both credits, the maximum credit is 10% of the purchase price for homes priced under $800,000. For purchases after November 9, 2009, the credit phases out for married couples with income exceeding $225,000, and single taxpayers with income exceeding $125,000.