8 Requirements for the New Homebuyer Tax Credit, Effective NOW!

Okay all you first time homebuyers, you’ve been given a second chance! The Homebuyer Tax Credit passed and was signed into effect on Friday, November 6th! What GREAT news!

And it gets even better! Not only do first time homebuyers benefit from the tax credit … to the tune of $8,000! … any homebuyer could potentially benefit, up to $6,500!

Here are some of the highlights. Of course you’ll want to verify this information with your own accountant; as with most bills of this sort it’s many pages long and there are requirements that must be precisely met.

1. A first time homebuyer is one that has not owned a home for at least three years.
2. To qualify, a repeat homebuyer, must have owned their current home for at least five consecutive years out of the last eight years. So … imagine that you owned a home for at least five years, but sold it and have now been renting for the last two years. You qualify.
3. If you’re a single person, you cannot earn more than $125,000; if you’re married, you can earn up to $250,000.
4. You must be in a contract to purchase your new home on or before April 30th … but you have until June 30th to close the transaction.
5. There’s no lag between the old deadline (November 30th) and the beginning of the new period … it’s as if the November 30th deadline never existed. The new deadline is April 30th (see #4).
6. The maximum purchase price for your new home is $800,000.
7. Your new house does not have to cost more than your last house. It’s okay to downsize!
8. Oh yes! And as a measure to prevent fraud, you’ll have to attach proof of purchase to your tax return in order to qualify. I haven’t read the entire Bill, but I would anticipate that a copy of your final HUD (closing) statement will probably suffice. But do ask your tax accountant. They’ll know.

SO, Congratulations. Now, don’t twiddle your thumbs and let this run out AGAIN! Call me and let’s get shopping!!