The President signed into law the extension of the first time home buyer credit effective on November 7, 2009. Along with the extension, there has been some additional provisions provided to not only first time homebuyers but also for homebuyers looking to move up to a larger home.
The new $6500 credit applies to a homebuyer that has lived in their personal residence for a consecutive period of 5 years out of the last 8 years. The limit is on homes that are $800,000 or less in the purchase price. If you go over that amount, the credit will be disallowed.
The income limitations apply to both first time homebuyer as well as the new 5 year homebuyer - single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 — may receive the maximum tax credit. These limits have increased from the previous provisions of the first time homebuyer credit.
To see if you qualify, please check with your tax advisor or check out the IRS website .