Time Winding Down on $8,000 Tax Credit

Time is winding down for prospective homeowners to take advantage of the $8,000 tax credit for first-time buyers.

The landmark program is set to expire at the month’s end. It’s certainly possible to get under contract on a home within 30 days, but folks who are on the fence about purchasing need to commit to the process immediately.

Also, remember that it’s a two-part deal — you must ink a sales contract by April 30 and close by June 30. There’s one notable exception, and that’s for members of the Armed Forces who are serving on extended duty outside the United States.

Those serving outside the U.S. have an extra year to take advantage of the tax credit. They must sign a sales contract by April 30, 2011, and close by June 30, 2011.

In terms of program requirements, there are a few major points to bear in mind:

• First-time buyers (or their spouses) cannot have owned a home in the last three years.
• Individuals can’t have annual income above $125,000; married couples who file jointly can’t have an income that exceeds $225,000 per year.
• You can’t  claim the tax credit if your purchase price is greater than $800,000.
• There’s also a $6,500 tax credit for those who have lived in their current residence for five out of the last eight years. The deadlines, income levels and purchase price maximum are the same.

The Internal Revenue Service has some key information about the tax credit.

Image: Neubie