How Much is a New Home Tax Credit?

The new home tax credit that was in effect for first time home buyers and "move up" buyers is available for people who:

• Purchased a home between November 30, 2009 and April 30, 2010.
• Entered into a contract to purchase a home by April 30, 2010 and will close by September 30, 2010.

First Time Home Buyer

A first time home buyer is a person who has either never owned a home, or has not owned a home for three years prior to making this purchase.

• The tax credit available is 10% of the purchase price of the home, up to an $8,000 credit.
• If you purchased a home as a first time home buyer for $70,000 your credit would be $7,000.
• If you purchased a home as a first time home buyer for $250,000 your credit would be $8,000.

Move Up Buyer

A different tax credit is available for people who were long time residents of their homes, and then purchased a new home in the time frames shown above:

• Tax credit of 10% of the purchase price, up to a total of $6,500.
• To be eligible you had to have owned your previous home for at least 5 consecutive years out of the 8 years just prior to the qualifying home purchase.

How to Get The Credit

In order to get the credit on your 2009 or 2010 taxes, you will need to file a Form 5405 with the IRS along with your taxes. You will need to include either:

• A signed HUD-1 Settlement Statement from your closing which has to show your name, address, the price you paid for the house and the date of settlement or closing.
• If your purchased a mobile home, you can also qualify for the tax credit. You will need to include a copy of your bill of sale with your name, the property address, date of sale and the purchase price.

Other Home Owner Tax Credits

Through the end of 2010 the federal government is also offering tax credits for the purchase of certain residential energy efficient upgrades.

If you own an existing home (not new construction) you may eligible for a tax credit of up to $1,500 for installing:

• Energy Star rated windows and doors
• Metal or asphalt roof
• Insulation
• New heating, ventilation, air conditioning system (HVAC)
• Non-solar water heater

New construction and existing home owners may also be eligible for a tax credit equal to 30% of the purchase price (with no limit) of a solar energy system, residential small wind turbineor a geothermal heat pump.

Get Legal Help

These tax credits are significant; make sure you are working with a professional tax attorney or real estate attorney who can advise you about these an other credits you may be entitled to.