Move-Up Home Buyers - This Credit is for You
70Moving Up
Homebuyer Tax Credit Expanded
President Obama signed an extension of the $8000 tax credit on November 6th, 2009. This new version of the tax credit is not just a first-time homebuyer tax credit, but an expanded “Homebuyer Tax Credit”. A current homeowner is now eligible for a $6500 tax credit ($3259 married filing separate).
To qualify, the provision defines the eligibility as "long-time residents of same principal residence". Someone who has owned a home and occupied it as the principal residence for any consecutive 5-year period during the last 8 years may also be eligible for a credit, also subject to the new income ceilings. This does include current homeowners, so long as the home was both owned and occupied by the taxpayer for at least 5 consecutive years.
The law indicates that you do not have to sell your existing property to qualify for the tax credit. This allows homeowners the option of keeping their existing property (becomes an investment property) and designate the new purchase as the primary residence. Consult with your accountant regarding this option.
The chart below references the eligibility requirements for both first-time home buyers and those that currently own.
Extended and Expanded Guidelines
Frequently Asked Questions
Question: Existing homeowner credit: Does the new house have to cost more than the old house?
Answer: No. Homeowners have the flexibility to purchase in the price range they want provided they meet the other qualifications.
Question: I am an existing homeowner. I signed a contract to purchase a new home in October and I have lived in my current home for more than 5 consecutive years and meet the income requirements. I am not scheduled to close until November 30, 2009. Can I get the $6500 credit?
Answer: Yes. The existing homeowner credit went into effect for purchases after November 6,2009.
Question: I owned my home for 8 years, but sold it last year and have been rentingsince. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?
Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8.
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Comments
Whoo Hoo! This is exactly what we needed! New Home Construction will benefit as well!
Inventory for first-time home buyers should increase with this incentive. The trick is get sellers to list their properties now. Spring is just around the corner.
This is great. Buyers will be coming out of the wood work over the next couple months. Sellers who have been on the fence about selling should see this as a positive, and list there properties. Now if the media can relay the message in a positive way its a win win.
Yes, the media is slow to react. They need to report the benefits
Tricia Connelly Reggio says:
2 weeks ago
I hope this will help to bring own better inventory for my buyers.