November 17, 2009
The President signed an extension of the first-time home buyers’ tax credit that was set to expire on November 30th. The credit is the lesser of 10% of the purchase price or $8,000. The bill also creates a new credit for taxpayers who have previously owned a home. That credit is the lesser of 10% or $6,500. The credit applies to new or existing homes. California has not renewed its credit which expired when the amount allocated for the credit was reached.
There are a variety of rules under the new federal law relating to how long you have to live in the house; the deadline for closing on the new home; the maximum value of the home; acceleration of the credit for those buying in 2010; and new higher income limits.
Take a look at the explanation of the new law, prepared by the Joint Committee on Taxation.