Newlyweds Often Omitted From Homebuyer Tax Credits

Real Estate Agent with Fonville Morisey Realty

Newlyweds The one subset of people short changed in the first time homebuyer tax credit are newlyweds where one spouse currently owns a home.  If the couple wants to purchase a new home jointly, either because they will reside in the area where the non homeowner lives, or will both be moving to another location, they're out of luck.  Under the tax credit rules, neither spouse can have lived in the previous principal residence of the home owning spouse for a period of three years prior to purchasing a new principal residence.  In a great majority of cases, this is not how couples unite, with one party owning a home but not living in it for three or more years prior to getting married.

Even the new existing homeowner tax credit provisions short change newlyweds.  Under this provision, both spouses must have lived in the principal residence for a period of five consecutive years out of the past eight years to qualify for the tax credit of up to $6,500.  So the union of couples where one spouse previously owned their prinicpal residence again won't qualify for the tax credit if they jointly purchase a new principal residence.

In a country with government policy presumably encouraging the creation and stability of families, this oversight is unfortunate. I personally know of at least two couples who have or will be denied a tax credit and I'm sure there are many, many more.  How many more of you have similar experiences?  Not anything that can be done about it at the stage of the game, but unfair to many newlyweds nevertheless.

 Larry Pulley



Comments (5)

Elizabeth Bolton
RE/MAX Destiny Real Estate Cambridge, MA - Cambridge, MA
Cambridge MA Realtor

Hi Larry ~ I don't think you can make tax policy that always works the same for everybody. As a single person I get mighty irritated by the fact that for many home-related deductions, credits, etc. married people get twice as much benefit. Makes no sense - everybody just lives in *one* house.  All the boo-hooing about the marriage penalty seems to have resulted in the pendulum swinging way to one end.  Time for singles to start complaining!


Dec 18, 2009 03:13 PM

My daughter who has owned her condo for over 5 years just married a young man who has never owned a home..they are selling the condo and buying a house..they cancel each other out on the ist time homebuyer tax credit and the repeat buyer tax credit because they married in Sept 09...The sanctity of marriage is not supported by our government..they should have not married and just lived together and this situation would never have happened

Jan 03, 2010 03:48 PM
Chuck Darwin

Larry, My wife owned her home for 10 years and I owned my home for 21 years, when we met in late 2005.  She moved into my home and sold hers shortly thereafter.  We now do not qualify whereas we would have both qualifed previously.  I have contacted Senator Isaksons office to address this issue and they claim to be working to amend the situation.  If more people in our situation would speak up about this maybe something could be done.

Jan 14, 2010 10:39 AM

My husband and I were married in May 2009 and purchased a new home together in January 2010. Pre-marriage I would have qualified for the move-up credit and my husband would have qualified for the first time homeowner credit.  If we had foregone marriage to live in sin we would be pocketing $8000 between us.  We do want to speak up about this discrepancy! What is the best vehicle for voicing our concerns about the unfair bias of this tax rule?  Our new home is in a different state, so if the Senate office is the right place to go, would we start with the state we are moving from or the state we are moving to or both?  Thank you for offering this blog post.  I had assumed we would easily qualify and the only question would be for how much.  What a disappointing surprise to learn of this special discrimination against 0-5 year newlyweds.   

Jan 30, 2010 01:53 AM
Larry Pulley
Fonville Morisey Realty - Durham, NC

Thank you all for your comments. It doesn't seem quite fair to me how the tax credit program handles newlyweds.  Contacting every Senator and Congressman with whom you have influence is a good place to start.  Unless the tax credits are extended beyond April 30, though, I'm fearful nothing will be done to correct this anomaly.

Feb 04, 2010 01:51 AM