Several months ago Congress approved a $6500 tax credit for homebuyers aimed at so-called "move up" buyers. Though it's been law since November, there are still a lot of questions and mis-information floating around. Here are a few things you should know about taking advantage of the tax credit:
- To qualify, you must have owned and lived in your current home for a consecutive 5 out of the last 8 years. And your income must be below $125k if you're single, $225k if you're married filing jointly.
- You may "move up" (buy a more expensive home) or "downsize" (buy a less expensive home); but whatever you buy cannot cost more than $800k.
- The replacement house must become your main home. There is no requirement to sell your previous home. You can rent it out, use it as a second home, or list it for sale at any time. If you plan to keep it, make sure you move into the new home upon closing so there is no question that it was your principle residence at that time.
- The home can be a newly constructed or pre-existing single family home, condominium, manufactured or mobile home, or even a house boat - as long as it functions as your primary residence. The $6500 tax credit does not apply to a second/ vacation home or investment property.
- Taxpayers are required to submit copies of their settlement statement (HUD-1 forms), along with their request for the credit using IRS Form 5405. Individuals who are under 18 or who are counted as dependents on another taxpayers filings are prohibited from claiming the credit.
- Eligible purchases made in 2010 can be claimed on either your 2010 or 2009 taxes.
- The deadline for this tax credit requires you to be in a binding contract by April 30, 2010 and have the purchase close by June 30, 2010. Do not assume that Congress will provide another extension!
The S&B Real Estate Team assists people in buying and selling real estate throughout Southwest Washington. We are proud members of Keller Williams Realty – Premier Partners in downtown Vancouver. Our local expertise covers: Vancouver, Battle Ground, Camas, Washougal, Brush Prairie, Hockinson, Ridgefield, Woodland and La Center. If you or someone you know is considering living or investing in Clark County, please contact us. Jamie Carroll can be reached at 360-609-6775. Steve Borwieck can be reached at 360-241-7305. Or drop us a note on the “Contact Us” page at www.sbreteam.com. We are here to help!
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