In order for repeat-buyers to claim the $6,500 tax credit, they must have owned and used their current home as a principal residence for five consecutive years out of the past eight years. In addition, these buyers must get under contract to purchase their new home by April 30, 2010, and close the transaction no later than June 30, 2010.
Consider the interesting scenario of a buyer who closed on their current home on June 30, 2005 -- exactly five years to the day prior to the closing deadline to claim the tax credit. Would this person qualify? What is the exact date that determines length of residence to fulfill the ownership requirement?
According to the Internal Revenue Service (IRS), to qualify for the $6,500 tax credit, a current homeowner "must have owned and used the same home 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." As a result, the buyer in the example above could claim the tax credit, but only if the closing for their new home takes place on June 30, 2010.
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