The April 30, 2010 homebuyer tax credit deadline is fast approaching. In order to take advantage of this tax credit a home buyer must have the home or property under contract before May 1. Don't miss the advantages a buyer's market creates and make sure you work with an experienced, knowledgeable real estate agent.

The Basics of the First-Time Homebuyer Credit

According to IRS.gov the following rules apply to all first-time homebuyers interested in receiving the tax credit based on The Worker, Homeownership and Business Assistance Act of 2009. (1)

-You must be an eligible taxpayer.

In order to qualify for the tax credit a home must be under contract by April 30, 2010.

-The real estate transaction must be closed by June 30, 2010.

-The tax credit can be up to $8,000 if you meet all requirements.

The Basics of the Existing Long Term Homeowner Tax Credit

If you have owned a home over the long term you also qualify for a tax credit. IRS.gov outlines the following rules for homeowners.

-You must purchase another primary residence.

-You must have lived in your current home for 5 consecutive years during the last 8 years. A Form 1098 Mortgage Interest Statement, homeowners insurance records and property tax records can be used to prove eligibility. (2)

-The tax credit can be up to $6,500.

-Contracts must be completed by April 30, 2010 and closing must be finished by June 30, 2010.

Additional Details Your Real Estate Agent Should Know

The reason homebuyers, especially those in the market of the first time, need an experienced real estate agent is so every detail about the transaction has been addressed. According to REALTOR.org there are some additional requirements for the tax credits some buyers may not be aware of.

First, if you are a first-time homebuyer you or your spouse must not have owned property in the last three years leading up to your purchase. (3) Second, the tax credit can be applied to single-family homes, condominiums, town homes and co-ops. (4) Third, the tax credit amount is determined by the price of the home and the buyer's income. Eligible homes must sell for under $800,000. Individual single buyers must make under $125,000 and married couples must make under $225,000 to qualify. Some homebuyers with higher incomes can receive below the maximum text credit. (5)

In an article published by the Wall Street Journal, titled The Lowdown on Home-Buyer Tax Credits, writer Laura Saunders explains yet another reason to buy a home now and take advantage of the tax credit. "The credits offer dollar-for-dollar reductions of tax and are refundable. This means that a taxpayer who doesn't pay enough tax to offset the credit can get a refund," writes Saunders. "For example, if you qualify for an $8,000 credit but only owe $5,000 in tax, you [could] receive a $3,000 check from the Internal Revenue Service," she continues. (6)

As you can see the homebuyer tax credit combined with the current buyers market makes the winter and spring of 2010 an excellent time to being looking for the perfect property and first dream home. Follow the tax credit guidelines, plan ahead and work with a real estate expert and you will easily complete a smooth real estate transaction before the April 30 deadline. Don't wait for the summer to by a home; start now and take advantage of the added benefits the tax credit provides.

Sources
(1) (2) www.irs.gov
(3) (4) (5) www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit
(6) www.online.wsj.com