The Loan Lady Blog

Good news. The first-time home buyer tax credit has been extended, with an additional tax credit for repeat buyers.

The $8,000 home buyer tax credit for first-time buyers will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close. First-time buyers who are in process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.

For the first time, the new legislation makes buyers who already own a home eligible for a credit. Homeowners who are buying a new primary residence would be eligible for a $6,500 tax credit beginning Dec. 1 if they owned their home for five consecutive years in the previous eight. The income caps are $125k for individuals and $225 for couples. Anyone who collects the tax credit but sells the home within three years of buying it must return the refund. The legislation limits the eligibility for the existing homeowner credit to homes worth $800,000 or less.