The homebuyer tax credit extension and expansion has passed the House by a vote of 403-12 after passing the Senate by a vote of 98-0. The new provisions took effect after President Obama signed the bill on November 6.
Here is a list of frequently asked questions about the tax credit changes. If you have additional questions contact Maria Tascon at 864-357-1022.
Q. If I bought a house last spring or summer, can I get a tax credit? You qualify if you are a first time home buyer and meet the other requirements, but not if you are a repeat buyer. The new credit for repeat buyers applies only to purchases made after November 6.
Q: What is the definition of "principal residence"? If you own more than one home, your principal residence is usually the one where you spend most of your time. In determining residence the IRS may also consider where your family lives and your mailing address for bills and correspondence, among other factors.
Q: Does the person who claims the credit have to use the home as a principal residence? Yes.
Q: If I buy a new home and live in it, do I also have to sell my old one in order to take advantage of the credit? This is unclear. The law appears to allow repeat buyers to retain their old home, for which no tax credit was given, while claiming a credit for the new one. What is clear is that if you buy a new home using the credit, you must use it as your principal residence.
Q. Existing homeowner credit: Must the new house cost more than the old house? No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.
Q. I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20.
Q. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit? Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.
Q. I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit? Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you're within the phase-out range).
Q. I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a non-negotiable price of $825,000. Will I be able to use any of the $6500 tax credit? No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home i neligible for any portion of the credit. The $800,000 is an absolute ceiling.
Q. I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests? Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight, what he did since 3 years doesn't impact eligibility.
Q. I am an eligible first-time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me? You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.
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Who do you know that is considering the possibility of buying and/or selling a home in the next 6 months? Feel free to share this information with friends and family. Email or call me at 864-357-1022 if you have additional questions or if you know anyone that can take advantage of this great opportunity. |
Not every day someone decides to give you $8,000, right? Well, this is this is the final opportunity to get the $8,000 tax credit for eligible first time home buyers. There is only 75 days left. The tax credit is set to expire on November 30. Click 
The 8,000 tax credit expires on December 1st, 2009. 
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