Tuesday, January 12, 2010
Homebuyer Tax Credit
Unfortunately my wife and I did not qualify for the tax credit when buying our home in 2009 but we are very jealous of everyone who has been able to take advantage of this great opportunity afforded to you by the federal government.To some of us, particularly those in the Real Estate business, this may seem like common knowledge. The reality is though that there are many Americans who have little familiarity with what the Homebuyer Tax Credit is and more importantly what it means to them. There's already a lot of information on the Internet so I'll do my best to provide a summary of key points and then some links to more detailed information. If you have any specific questions around the tax implications of your situation make sure to consult your tax person!
This tax credit not only benefits first-time home buyers and qualified move-up buyers but also anyone looking to sell a home that these two audiences might desire. As a seller this is a great opportunity of increased demand to get your home on the market and sold.
As a qualified first-time buyer you would be eligible for up to $8,000 in a tax credit. What is a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. [1]As a qualified move-up buyer you would be eligible for up to $6,500 in a tax credit. What is a move-up buyer?
The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.[1]As a buyer, what do you need to do to take advantage of this tax credit?
- Find a local Real Estate Agent who is a good fit for you and your needs.
(This step is optional, but highly recommended.)
- Start house hunting!
- Have a contract on a property by April 30, 2010.
- Close on that property by June 30, 2010.
As a seller, what do you need to do to take advantage of this tax credit?
- Find a local Real Estate Agent who is a good fit for you and your needs.
(This step is optional, but highly recommended.)
- Get your house on the market ASAP!
- Have a contract on a property by April 30, 2010.
- Close on that property by June 30, 2010.
So, have you been able to take advantage of the tax credit? Why do you think you should or shouldn't take advantage of the credit?
For any of you who were familiar with the prior tax credit here is a table with some of the differences from the initial tax credit and the now extended and expanded tax credit: http://bit.ly/75u71M
[1] This website has extensive detailed information about the tax credit (make sure to check the FAQ) and is the source of the above definitions - http://bit.ly/8jB2Fn
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