Thinking About Using Tax Credit Toward Buying Real Estate? Act Fast!

If you are thinking about using the extended and expanded home buyer tax credit to purchase a home this year you better act fast. The tax credit can be used on homes purchased by July 1, 2010, but the homes must be under contract by April 30, 2010. What does this mean?

You have a little more than a month to locate your new home. The tax credit is for two types of buyers, first time home buyers (home buyers who have not owned a home in the past 3 years) or home owners who have lived in their home for 5 of the past 8 years and want to purchase a new primary residence.

Important aspects of the tax credit include:
- Homes must be closed by July 1, 2010, under contract by April 30, 2010.
- Homes must have a value of $800,000 or less and must be the buyer’s primary residence.
- There are income restrictions, $125,000 for singles, $225,000 for couples.

The credit is also affected by being single or married. Married couples who file together are entitled for up to $8,000 for a first home buyer, up to $6,500 for current homeowners. Single people are entitled for up to $4,000 for a first time home buyer and $3,250 for a current homeowner.

The credit will need to be repaid if you sell your home within a time period of 36 months.
Remember, time is running out. Contact a real estate professional today to start looking for your new home if you intend on using the tax credit.

Astute real estate investors have invested funds into purchasing and rehabbing homes throughout the country. In Philadelphia, homes for new buyers are on the market in various parts of the city and at various price ranges. Lists of available homes are either posted on the Multiple Listing Service (MLS) or listed some by For Sale By Owners (FSBO) on sources such as Craig’s List and can easily be toured set up by a realtor or the owner of the home.