Sellers wishing to sell their home and buy another have been asking me if they need to sell before purchasing another home to get the credit.  The answer is "NO".  If you can obtain financing for the new home until you sell the other that is one way.  The other, which is a little more difficult in the current housing market is to to do a contingency.  If your home is priced right and in top shape to sell, you should be able to manage this.

According to the Internal Revenue Service, you do not have to sell your current house which must have been owned and used as a principal or primary residence for at least five consecutive years of the eight year period ending on the date of purchase of a new home as a primary residence in order to take advantage of the new $6,500 tax credit for repeat homebuyers so long as the new house becomes your primary house.

There are, however, some additional limitations.  While you do not have to purchase a home that is more expensive than your current home to qualify for the credit, if your new home costs more than $800,000, you are not eligible for that credit.

There also are income limitations.  For single taxpayers, you cannot make more than $125,000 annually; for married couples, you cannot earn more than $225,000 if you file a joint tax return.  There is a phase-out until your income reaches $145,000 for a single taxpayer or $245,000 for joint tax filers.  This means the credit is reduced proportionately until you reach the ceiling cap.

Yo cannot purchase the new home from family members, which includes parents, grandparents or children.

Finally, the purchase must take place by April 30, 2020.  However, if you have entered into a binding contract before that date, you must close escrow by June 30, or you will lose this credit.

 


I am Sandra Mathewson, a full-time Realtor working both as a listing agent and a buyer's agent. I love using the internet to meet people and keep in touch with friends and clients. I write this blog to show you why Reno, Sparks and Fernley real estate is truly something to be desired.

Whether you are considering buying or selling, you can visit me at my Reno, Sparks, Fernley homes for sale website. You will find my website as your best online source of information. How is the market doing? I'll keep you posted with the most current MLS reports. You can also search for homes for sale in Reno NV (including Sparks, Fernley and surrounding areas). Read about the communities, events and things to do around Reno NV in this great Northern Nevada Lifestyle.

 
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2 Comments on Tax Credit For Seller's Looking to Purchase Another Home

JAN
24
2010
998,819 Points 4 Featured Posts

What a good post on the credit for the sellers, some of which I did not know. This of course will be a great tool to get some of the sellers off the fence.
7:54am • #1

Thank you Charles!

I am working with a seller right now who is aware of the tax credit and contacted me.  This seller also took my advice and put in new carpet and paint and had the home in top condition.  Within 16 hrs. of being listed in the MLS we had a full price offer.

Yesterday we made an offer on a replacement home for them and they are just thrilled. It's nice when you do everything right and it pays off.
Sandra Mathewson
9:38am • #2


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