• The Tax Credit: Eligible purchasers may qualify for a credit against their state income taxes in an amount equal to the lesser of 5% of the purchase price or $10,000. The credit will be applied over a three-year period. The credit may only be applied to the purchase of one qualified property.
• Property Eligibility: To qualify for the credit the property purchased must be a single-family residence, either detached or attached, that is the principal residence of the purchaser. First-time homebuyers may purchase either newly constructed or a “resale” homes. All other buyers must purchase a home that has not been previously occupied. We anticipate the regulations that will implement this legislation will further define what “not previously occupied” means.
• Homebuyer Eligibility: First-time and “move-up” homebuyers who are at least 18 years of age. “First-Time” homebuyer means any individual who had no ownership interest in a principal residence for at least the preceding three-years.
• Occupancy Requirements: Purchasers will be required to live in the home for at least two years or forfeit the credit.
• Deadline: To qualify for the credit a property must be purchased on or after May 1, 2010, and on or before December 31, 2010. Details about extending this deadline to August 1, 2011 are still forthcoming.

As with any tax-related issue, always consult a tax professional if you, or your clients, have specific questions about this new tax credit.