Did you know that the new “Homebuyer tax credit” can apply to you when you build a new home?
For the purposes of the credit, you may claim your new home as long as you begin occupancy between November 6, 2009 and April 30, 2010. This date can be extended to June 30, 2010 as long as your binding contract was in force by April 30.
I can’t imagine being able to move into a newly built home that wasn’t under contract two months earlier, but perhaps they are counting the installation of a manufactured home in the “new construction” category.
But anyway… if you enter into a contract for a new home now and it is not ready for occupancy until June 29, you can still claim the credit.
Be sure that you get and keep documentation of that occupancy date, because you’ll need it for proof of your eligibility when you claim the credit. In some counties this is a sign-off from the building inspector.
First time buyers who meet the income requirements can claim the entire $8,000. And you don’t actually have to be a first time buyer to qualify. You simply must not have owned a home for the previous 3 years. So, if you sold your home a few years ago and have been traveling around, “trying out” new communities, you’ll be eligible even if you had owned a home for 30 years in the past.
The other class of consumers who are eligible are those who own a home now and have lived in it for 5 of the previous 8 years. So, if you had owned your home for at least 8 years and just under 3 years ago you moved out and turned it into a rental, you’d still be eligible.
These consumers can receive up to $6,500 as a tax credit, depending upon their income. The calculation is a bit convoluted, so do check with your tax advisor to see if you qualify. He or she should soon have the official regulations from the IRS.
I have to be honest. I was not in favor of the previous credit and am not in favor of this one, but there it is. Your taxes are paying for it, so you might as well use it.
I am curious about why they decided to exclude certain people. I’m thinking of those who have owned their current homes for less than 5 years and people who don’t own a home now but did 2 years and 11 months prior to their new purchase.
Are these people that they want to discourage from buying? If so, why? It's another one of those "What were they thinking?" questions that we ask about the government every day now.
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Wishing you a happy home... be it old or new!
Marte
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