Does a Lease Option Contract qualify for the First Time Homebuyers Credit?

Real Estate Agent with Success Investment Realty

From the Real Estate Hotline

Question:  I am a first time homebuyer and  have just signed a Lease Option Contract for a personal residence.  Do I qualify for the First Time Homebuyers Credit? 

Answer:  A Lease Option is usually created with two contracts:
1. A lease
2. An option to buy

For the purpose of claiming the First time Homebuyers Credit - a lease does not qualify as a sale and neither does an Option to buy contract.  (The option contract just gives you the 'option' of purchasing the property in the future.)

However, if you exersize the Option to Buy contract before the tax credit deadline (November 30,2009) and actually purchase the home - you would then be eligible to claim the credit. 

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