10 Things to Know about Home Buyer Tax Credit

Last Saturday, the Arizona Republic ran a article, “10 Things to Know about Homebuyer Tax Credit“, that lead off with “First Thing: Time is Running Out“!

Some of the most critical points covered are:

1. Buyer must either purchase or be under contract to purchase a home by April 30, 2010.  The property purchase must be completed by June 30, 2010.  One important clarification that I learned in a Short Sale class taught by attorney Chris Combs earlier this week, is that if the seller has accepted a contract with a Short Sale contingency by April 30 that the sale is still considered under contract.  The pending bank agreement is a contingency, similar to getting a loan approval or property appraising at purchase price.  Very important for buyers and sellers to understand this, and at the same time, understand the property must still close by June 30th.
2. Both first-time and long-term resident buyers qualify for up to 10% of the homes purchase price, up to limits of $8,000 for the first-time home buyer and $6,500 for the move-up buyer.
3. To be considered a first-time home buyer, the buyer cannot have owned another personal home anytime in the past three years.
4. Long-term resident buyers must have lived in the same primary residence for five consecutive years out of the past eight.
5. If the home purchased using the tax credit, is sold in the first three years, the credit must be repaid.

There are a number of other requirements related to income, home price, and more, so you will want to read the entire article and review the following resources:

• Home Buyer Tax Credit: 10 Things to Know — SmartMoney.com, November 11, 2009
• Ten Important Facts about the Extended First-Time Homebuyer Credit - IRS.gov, IRS Special Edition Tax Tip 2009-13

Any questions?  Please comment or call.