Tax Credit Extended in Delaware

President Obama signed an expanded version of the $8,000 first-time homebuyer tax credit. The previous version was due to expire November 30th. This newer version may stimulate the housing market even further than the last since this version qualifies more buyers. The tax credit remains at $8,000 for homebuyers that have not owned a primary residence in the past three years and it also includes a $6,500 credit for homebuyers that have lived in their primary residence for 5 consecutive years out of the past 8 years. Under the old version, those simply moving up the housing chain did not qualify, now they may.

The tax credit will apply to purchases for less than $800,000 before May 1, 2010. If however, you enter into a sales contract prior to the deadline and settle prior to July 1st, you may still qualify. The income limitation for single tax payers is $125,000 and for married taxpayers the limit is $225,000. Both income categories is an increase from the previous plan.

The credit applies to 1-4 unit homes provided you live in one of the units as your primary residence. You could live in one unit and rent out the others. If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit). The tax credit applies even if you have co-signers on your mortgage loan