Valley Vista Blog

For 2010, the IRS has extended the federal tax credit for first-time home buyers and has made the credit available to existing homeowners. The credit is $8,000 for first-time home buyers and $6,500 for existing homeowners. You may claim the credit on either your 2009 or 2010 tax return.

In order to qualify for either tax credit, you must enter into contract to purchase a home by April 30, 2010 and close escrow by June 30, 2010. To qualify as a first-time home buyer, you cannot have owned a primary residence within three years leading up to the purchase. To qualify as an existing homeowner, you must have owned and occupied the same home as a primary residence for at least five consecutive years of the previous eight years leading up to the purchase.

The new law also raises the income limits for both classes of buyers so that more people can qualify. The maximum tax credit is available if you have a modified adjusted gross income (MAGI) of $125k single/$225k joint. For those with MAGI up to $145k single/$245k joint, a reduced credit is available. Another restriction is that the purchase price of the home must be less than $800k. Apparently the IRS has decided that entry-level buyers in many areas of California do not deserve a tax credit!

For more information, you can visit the official IRS website at: http://www.irs.gov/newsroom/article/0,,id=215791,00.html or call the Valley Vista Inc office at (559) 294-7667.

Stay tuned for Part 2: State!