Home Owner Tax Credit Guide

All You Need to Know About the New $6500 Home Buyer Tax Credit

By now, you must have heard about the $6500 Home Buyer Tax Credit that the House and Senate passed last November. An extension of the old $8000 First-time Home Buyer Tax Credit (which expired on Nov. 30), this new bill allows homeowners who have lived in their houses for five years or more to get up to $6,500 off their tax bill when they purchase new property.

Personally, I think this is a good move on the side of the government. An incentive like this will definitely encourage those who have extra money to invest it in real estate, creating a more normal flow in the buying and selling market.

Want to know if you’re eligible for the tax credit? Find out here:

See if You Qualify for the $6500 Tax Credit

1. The 5 Year Rule
Only those who have owned their homes for 5 years or more qualify for this bill. No exemptions.

2. Income
Single taxpayers with incomes of $125,000 or below are eligible for the full benefit. Those with incomes between $125,000 to $145,000 are eligible for a partial tax credit.

For joint filers, income must be $225,000 or below to get the full credit and up to $245,000 for partial.

3. Property Value
Only homes $800,000 and below are eligible for the tax credit.

4. Purchase Deadlines
All sales must be secured by April 30, 2010 and closed by June 30, 2010.

These four requirements make you eligible for the $6500 Home Buyer Tax Credit. First-time buyers? Not to worry. You can still get the original $8000 tax credit.