Expansion Success
EXPANSION SUCCESS
Congress and President Obama passed both an extension of the $8,000 First Time Homebuyer Tax Credit and added a REALTOR® supported $6,500 Homebuyer Credit for citizens who have lived in their home for 5 consecutive years in the past 8 years.
Passing the law is great for real estate through April 30th, 2010. It is anticipated that the Congress will not continue this program after this Extension/Expansion.
Details are difficult to get at this point. Many of you have asked for details on the program targeted to help move-up buyers. Many of those have not been released yet as the IRS begins deciphering the legislation. These also include questions about whether investor and 2nd home purchases qualify for the credit. These details will be forthcoming as the intent in the statutory language is put in effect.
Until the full details are released, NAR has released a Frequently Asked Questions (FAQ) and a chart comparing the programs.
Some common questions:
Must a homeowner sell their current home to receive the tax credit? NO
Can they rent their previous home and purchase another home and get the credit? YES - as long as the replacement/new home is going to be their primary home.
Can it be used to buy investment property/second home/cabin? NO - it must be a replacement primary residence.
If a homeowner bought less than four years ago, but owned prior to that, would they qualify? NO - They must have lived in the same (key word being "same") principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.