New home buyers can qualify for as much as an $8,000 federal tax credit, and existing home buyers can claim up to $6,500 off their US income tax bill, for purchasing a new or existing home as a principal residence anywhere in the United States providing they have a binding sales contract on or before April 30, 2010 with the closing completed by June 30, 2010. And NAEBA stresses that these are tax credits, not simply tax deductions, so taxpayers may reduce the amount of tax they owe dollar-for-dollar for the qualifying tax year.
There are also special rules in the legislation for U.S. military personnel, members of the Foreign Service, and employees of the intelligence community, giving a one-year extension of these dates for those service members ordered on a period of official extended duty. A “qualified service member” may enjoy the tax credit for a binding home purchase contract completed before April 30, 2011, with a sale closing before June 30, 2011.
NAEBA is a pioneering nationwide association of real estate agents who exclusively represent the needs and goals of buyers in home purchasing transactions. Using an exclusive “Buyers Bill of Rights,” NAEBA agents by contract remove the traditional conflict of interest inherent in most residential real estate transactions where the agents on both sides of a purchase are obligated to the sellers.
The home buying tax credits were created in last year with the enactment of The Worker, Homeownership, and Business Assistance Act of 2009. Both first-time homebuyers and move-up/repeat homeowners may qualify for the tax credits if their individual income does not exceed $125,000, or is no more than $225,000 for married couples filing joint returns. There are proportionally reduced tax credit amounts for people exceeding these income levels. The tax credit is equal to 10% of the home’s purchase price up to a maximum of $8,000 for first-time homebuyers, and 10% of the home’s purchase price up to $6,500 for repeat buyers.
A “first-time buyer” in defined in the legislation is defined as someone who has not owned a principal residence during the three-year period prior to purchase. If the home is sold or the purchaser ceases to use the home as a principal residence within three years of the initial purchase, the tax credit must be repaid.
For repeat home buyers to qualify for the tax credit, they must have owned and lived in their previous home for five consecutive years out of the last eight years, and the three-year ownership and occupation provision to avoid repayment of the credit also applies.
In all cases, the homes in question must have a purchase price of $800,000 or less, and they cannot be purchased from or among other family members, including spouses, parents, grandparents, children or grandchildren.
The home buying tax credit may be claimed for the purchase of any primary residence, as defined in the IRS Code for calculating the capital gain tax exclusion for principle residences, including single-family homes, new homes purchased from a homebuilder, attached homes, townhouses, condominiums, manufactured homes (mobile homes) and houseboats.
There are even provisions in the law for home purchasers using FHA-insured mortgages to “monetize”
NAEBA officials point out that with just over two months left to qualify for the tax credit through a binding home purchase sales contract, there is still ample time to take advantage of these unique money-savings opportunities. All NAEBA agents are well schooled in the qualifications and provisions of the tax credit legislation and can assist home buyers in every aspect of qualifying for and preparing to claim their tax credits.
NAEBA was established in 1995 by real estate agents who recognized the need to establish guidelines to protect the best interests of buyers in home purchasing transactions. The association maintains a rigorous list of membership requirements, including Certified Exclusive Buyer Agent certification, ongoing education, and state-by-state knowledge bases that ensures each NAEBA agent is an expert in both national and local real estate laws, markets and practices.
For more information about NAEBA and to find a NAEBA agent locally, visit the association’