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Washington DC Real Estate Resource Center: Extended Homebuyer Tax Credit

The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence, as well as established a tax credit of up to $6,500 for qualified existing homeowners purchasing a principal residence. Homebuyers qualifying for the tax credit must purchase a principal residence on or before April 30, 2010, go to contract before May 1, 2010 and close before July 1, 2010. Eligible properties for the tax credit include anything that will be used as a principal single-family residence, including condos and townhouses.

What the Extended Homebuyer Tax Credit Means For You

The act also established income guidelines on the tax credit, stating that individuals with an adjusted gross income up to $125,000, or $225,000 for married couples filing jointly, are eligible for the full tax credit. Married couples are not eligible to claim the first-time buyers credit if either spouse has previously owned a home, but may qualify for the repeat homebuyer tax credit. The repeat homebuyer tax credit is available to existing homeowners who have lived in their current homes for five consecutive years out of the past eight years. Congress has also allowed expanded tax credit benefits to members of the military, Foreign Service, and intelligence community.

The tax credit is subtracted directly from the buyers' tax liability. Therefore, if the credit is more than the buyers' total tax liability that year, that individual will receive a refund check for the balance. Neither the first-time homebuyer tax credit nor the repeat homebuyer tax credit has to be repaid, unless the home is sold or ceases to be used as the buyer's principal residence within three years of purchase.

For more information on how the Worker, Homeownership, and Business Assistance Act of 2009 may benefit you as a first-time homebuyer or existing homeowner, contact Michelle Buckman, an expert licensed realtor in Washington, DC and Maryland. Michelle represents W.C. & A.N. Miller and Christie's Great Estates properties in Chevy Chase, Northwest Washington, DC, Capitol Hill and the up and coming Trinidad DC neighborhood. Specializing in the sale and resale of single family home and estates, condos, co-ops, and multi-unit buildings, Michelle works with a full range of clients, including upscale buyers and sellers, investors, and first-time buyers.