Moving On Up – $6,500 Federal Tax Credit

Uncle Sam is once again opening his wallet but for a new group of Americans:  those who already own a home and are thinking about down-sizing or moving-up to a new home!  Thanks to the recent extension and expansion of the Federal housing tax credit, qualified move-up and repeat home buyers now qualify for a tax credit of up to $6,5oo.  With first-time buyers covered and now the ‘move-uppers’, the time could not be better to purchase Chicago real estate.

This credit has a few qualifications that home owners must follow in order to use it.  Homes must be a principal residence and need to be purchased after November 6, 2009 and before April 30, 2010.  The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. Homes priced above $800,000 are not eligible for the tax credit. For answers to basic questions, we suggest visiting the frequently asked questions about the $6,500 Home Buyer Tax Credit at the Federal Housing Tax Credit site.

“Move-up” buyers who buy a new home don’t have to purchase a more expensive home than their previous home to qualify for the $6,500 tax credit., but they need to have lived in their previous home for at least five consecutive years of the eight years prior to the purchase of the new home. Both married taxpayers, must qualify.

Remember, there are income limits you must meet to qualify. A single taxpayers less than $125,000; and the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. Ask your accountant if you have specific questions!

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