Home Buyer Tax Credit: Not Just for Home Buying Virgins Anymore

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Want to Save Thousands on Your New Home Purchase?

The First Time Home Buyers tax credit law was just recently extended through May 1, 2010. The part of the new law that has been under-reported is that the new law extends tax credit to those who are veterans of home buying.

The first time home buyer tax credits basically remain the same as the one that was supposed to have expired November 30, 2009. It provides first time home buyers with an eight thousand dollar tax credit on the purchase of a qualifying home. The rules for repeat buyers are a little different-so read on to get the details.

Here is a quick review of the pertinent points of the Home Buyer Tax Credit for the first time home buyer:

• Up to 10% tax credit on the purchase price of a new home-maxing out at $8,000.00

• Must not have owned a home for at least the three years before the qualifying purchase.

• If a couple, both individuals must meet above criteria.

• They must live in the new home for three years as their principal residence.

• You cannot purchase the home from a parent, grandparent or your children.

• If your tax credit is above your tax liability, you may receive a refund check for the balance. (If you qualify for 8,000 dollar credit and your tax bill is 4,000, you may receive a refund in cash for the balance.

• Home purchase price is capped at $800,000.

The pertinent points for repeat home buyers:

• Must have been living in one residence for five of the last eight years.

• The tax credit is up to 10% of the purchase price, but is capped at $6,500 for repeat buyers.

• Married couples modified income limit begins to phase out at $225,000 and is capped at $245,000.

• No retroactivity- Must purchase between November 6, 2009 and close before July 1, 2010 with a contract in hand before May 1, 2010.

To qualify for both first and repeat buyers credits you must provide proof of purchase-usually a HUD-1 form with your tax return. Your new home does not have to be a detached single family home, but you do have to live there as your principal dwelling-and proof of occupancy may be required if you get audited.

So for those of you who thought the gravy train of a large tax credit was over, this gives you new life to find that qualifying new home-go forth and do your part for the real estate community and buy a new home-but only buy what you can afford. That tax credit will be of no benefit to you in a year or two if you are struggling to make your payment. The F-word (foreclosure) is no fun, and that new home can become a burden instead of your new castle.

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Occupation: Author and OBGYN
Kenneth "Dean" Burke, MD, is the author of The Millionaire Nurse: A Proven Financial First-Aid Kit for Building Wealth and Achieving Freedom.

A Fellow of the American College of Obstetricians and Gynecologists, "Dr. Dean" has been a practicing OBGYN for 25 years. But it wasn't until the nurses in his office approached him for financial advice that his passion for sharing financial secrets with nurses was born. Soon, he was hosting weekly office meetings with his nurses. The results were transformational. The movement grew. And today, Dr. Dean's wealth-building keynote speeches are enjoyed by nursing audiences nationwide.

"I respect and admire nurses so much that I'm married to one," says Dr. Dean. "It's not fair that some of the hardest working people in healthcare--our nurses--don't enjoy the financial freedom and peace of mind that so many doctors do. That's why I wrote The Millionaire Nurse, and that's why I love sharing the secrets of financial success with nursing audiences across America."

Dr. Dean graduated Summa Cum Laude from Georgia Southwestern University and then graduated from Medical College of Georgia in Augusta, Georgia. He completed specialty training at Mercer University School of Medicine.

Today, Dr. Dean and his wife, Thea, have two children and divide their time between their homes in Georgia and Costa Rica.

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