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Close by Sept. 30 to Receive Homebuyer Tax Credit

U.S. homebuyers who are eligible for a Homebuyer Tax Credit have until Sept. 30 to close the transaction and receive the credit.

Congress has extended the closing deadline, which had been June 30, by three months. The action affects an estimated 180,000 homebuyers who, because of circumstances beyond their control, had been unable to close on their purchase by the original deadline.

One factor in the backlog is that many of these transactions are Short Sales that often require extended time to complete.

Buyers who secured a purchase contract by April 30 are eligible to receive the credit. This is money that never has to be repaid, provided you live in the home for three years.

Qualified first-time buyers can receive a credit of 10 percent of the home price up to $8,000. You are considered a first-time buyer if neither you nor your spouse has owned a principal residence in the U.S. in the last three years.
 Homebuyers who owned and lived in their principal residence for five consecutive years of the last eight are eligible for a credit of up to 10 percent of the purchase price, up to $6,500.

The National Association of Realtors estimates that 4.4 million people have received the credit since it was made nonrefundable in 2009. That includes 2.9 million first-time buyers and 1.5 million repeat buyers.

Other facts about the Homebuyer Tax Credit:

  • The upper income limit to receive the full credit is $125,000 for individuals and $225,000 for couples.
  • If the purchase price is more than $800,000, you are not eligible for the credit.
  • You can apply the credit to the 2009 or 2010 tax years. There is no minimum income for claiming the credit. You qualify for the full credit even if you wont owe any taxes for 2009 or 2010.