For those of you who might be thinking about purchasing a home or who are are fortunate enough to still have clients who may be purchasing a home, you are reminded that the First-Time Homebuyer Credit has been extended and expanded. It now requires a Contract to Purchase to be entered into on or before April 30, 2010, and the transaction closed on or before June 30, 2010, IRC §36. The Credit is generally limited to 10% of the purchase price but not to exceed $8,000.00. There are numerous limitations and restrictions, and like most federal laws, what you see is not always what you get; for example, “first-time” includes anyone who has not owned a home for the last 3 years before the purchase. And, if you currently own a home you have lived in for any 5 consecutive year period during the last 8 years, you can still qualify for a reduced credit of $6,500.00 if the new home is purchased/closed after November 6, 2009. Further, a “purchase” does not require an actual transfer of title; so an installment purchase/agreement for deed will qualify.
