www.lasvwegasmtg.com Report: The tax credit for home purchase is the the buzz words on every persons lips from buyers to Real Estate agents. While everyone is very familiar with the $8,000.00 first time home buyers tax credit as this has been available since January 1st, 2009, it is the new provisions of the tax credit of $6,500.00 for buyers of existing home owners that seems to have some people confused on who is eligible for this credit.
I have heard from buyers and Real Estate agents stating that everyone who owned a house for 5 years out of the last 8 years would be eligible to receive the $6,500 Tax Credit. While this is technically correct, it does not included the some of the other provisions that the government requires for home buyers to qualify for this credit.
1) From December 1st 2009 through April 30th 2010 previous home owners are described as any HOME OWNER THAT HAS SOLD OR IS PENDING SALE that was owned and used as principal residence for 5 out of the last 8 years would be eligible for $6,500.00 if filing jointly would receive $6,500.00 or $3,250.00 if filing separately for a new home purchase.
2) Tax credit will terminate on all contracts with dates after April 30th 2010 and will have to close by July 1st, 2010.
3) Income limitations for a single person is $125,000.00 and for a married couple $225,000.00 with additional income of $20,000.00 will be adjusted on a sliding scale.
4) Maximum purchase amount is $800,000.00.
5) Documentation is required to be attached to tax returns for tax credit.
What has been lost is that the principal residence must have sold or is pending sale to be eligible to receive the tax credit.
How many home owners will likely get the tax credit of $6,500.00 if they are unaware that they would be ineligible unless they had already sold a house? How many home owners that still own their house will put their house on the market just so they will be eligible for the tax credit of $6,500.00? If they only list their home so they could receive the tax credit with no intent on selling do to being under water does this constitute fraud?
The tax credit of $6,500.00 for previous home owners is a policy that is deceptive and could be abused to take avantage of the credit.