Q & A on New Home Buyer Tax Credit

Posted by: Prashant Gopal on November 6, 2009

The National Association of Realtors Web site has a nice Question & Answer section about the new credit

The Realtors’ spokesman tells me that the new credit will start tomorrow, not today.

“We rechecked the effective date for the repeat buyer,” spokesman Walt Malony said in an e-mail. “The effective date is ‘after the date of enactment.’Today is date of enactment, so the fun begins tomorrow, Nov. 7.”

Judging from all of your questions, tomorrow is going to be a confusing day for buyers, sellers, and the real estate agents, brokers, and attorneys advising them.

Reader Comments

Scott

November 6, 2009 6:07 PM

I've owned a house for 10 years and would like to buy another house in another state to move to. I want to buy that house BEFORE I sell my current house.Would I qualify for the credit if I buy within the deadline??

B. Sun

November 7, 2009 8:56 AM

Many thanks. I finally learned the effective date from you. All the other news articles did't mention the effective date at all. Thanks! Thanks!

Gary

November 7, 2009 10:42 AM

I am in contract to close on my present home within the next 2 weeks. I am also in contact with a proposed closing date on my new home 1 week after the first closing.
What are the time restrictions related to this new tax benefit for repeat buyers ?
Should I go ahead with the closing on my home that I have ( owned and lived in for 35 yrs.)and delay the closing date on my new home until after Dec 1.
There have been some blogs that have said that the purchase ( closing) on our new home must occur after Dec 1, 2009. What if the contract was signed in September ?
Thank s for the response

Kathryn Stiner

November 8, 2009 11:55 AM

I bought my house Oct 2005 just miss the Tax Credit. Will I be able to apply for the tax credit now. Also is $125,000 net or gross income. Thanks.

Kristine Wilcox

November 8, 2009 2:00 PM

My boyfriend and I are closing on a home 11/12/09. I have recently sold my old home and qualify for the repeat home buyer tax credit of $6500. My boyfriend sold his home 5 years ago and qualifies for the new home buyer tax credit of $8000. The IRS tax credit form #5405 says that two unmarried individuals can buy a main home and allocate the credit using "any reasonable method" so long as the credit is not allocated to a co-owner who is not eligible to claim that part of the credit. (I can't find a tax form for repeat home buyers) How can we take advantage of these credits? Does it matter how we take title? (we were planning on taking title as joint owners giving each 100% ownership with rights of survivorship) If we need to change that I'll need to know asap since we're suppose to close in 4 days. Any clarification you can provide is greatly appreciated!

T

November 9, 2009 8:21 AM

waste of my tax money. Those people who need this tax credit in order to buy a house are exactly the people who should not be buying a house. It means they are taking on too much risk - they have little to no savings and need this credit to make the deal work. there are advantages to renting, not everyone needs to be an owner(at any cost or risk)- people need to wake up, use their brain and break out of the herd.

Teresa

November 9, 2009 10:33 AM

If you need this credit to buy a house then you should not be buying a house. Take responsibility for your finances; with unemployment at 10.2% (and growing) the risk is significant, you should have money in the bank to whether possible impacts to you.

Teresa

November 9, 2009 11:10 AM

If you need this credit to buy a house then you should not be buying a house. Take responsibility for your finances; with unemployment at 10.2% (and growing) the risk is significant, you should have money in the bank to whether possible impacts to you.

Abe

November 9, 2009 8:55 PM

My wife and I just closed on a house on October 19th. She was in her previous house for 5 1/2 years. Anyway we could get the tax credit? Or are we just out of luck?

NORVELL

November 9, 2009 10:39 PM

Are you kidding...90% of the people that are going to get the credit are people that were going to buy a house anyways. I would just like to thank Obama for upgrading all of my appliances in my new house, and supplying enough funds to install hardwood floors throughout the house.

Tim

November 11, 2009 12:42 PM

My wife and I bought our house on 11/20/07. First time home buyers does anybody know of any type of credit, that we could use, to get some money back.

Don

November 11, 2009 1:49 PM

am in contract to close on my present home within the next 2 weeks. I am also in contact with a proposed closing date on my new home 1 week after the first closing.
What are the time restrictions related to this new tax benefit for repeat buyers ?
Should I go ahead with the closing on my home and delay the closing date on my new home until after Dec 1.
There have been some blogs that have said that the purchase ( closing) on our new home must occur after Dec 1, 2009.

Norman

November 12, 2009 12:09 PM

I have owned and lived in my present home as a primary residence for 15 years. I plan on buying a new home as a primary residence and keeping my existing home as a second home/vacation property. Will I be eligible for the $6500 tax credit on the purchase of my new primary residence and what burden of proof will I require to demonstrate my new home as primary?

Sassy

November 15, 2009 3:45 PM

Unless stated otherwise in the legislation, the start date of that legislation is the date it is signed into law. If it was signed on the 6th, it is presumed it is effective the 6th.

Sassy

November 15, 2009 3:45 PM

Unless stated otherwise in the legislation, the start date of that legislation is the date it is signed into law. If it was signed on the 6th, it is presumed it is effective the 6th.

sassy

November 15, 2009 3:48 PM

Unless otherwise stated in the legislation, the effective date of that legislation is the same as the date it is signed into law. If HR 3548 was signed on the 6th, it goes into effect on the 6th.

CWeller

November 17, 2009 11:26 AM

We closed on our newly built house in October 2009. 3 weeks later the 6500 repeat buyer tax crdit is signed into law. Since we did not close after 11/1/09 do we miss the tax credit altogether even after 3 weeks. If we would have known this we would have postponed closing. What do you think SOL?

Shannell

November 18, 2009 4:36 PM

How does the $8000 tax credit work do you get the money to help out with whats wrong with the house or does it help pay part of the house bills like the loan.I really want to buy a house & when is the closing date for the tax credit.

MohsenS

November 19, 2009 9:57 AM

I closed on my new principal residence in September 2009. Am I eligible for the $6,500 tax credit since I did not close after 11/1/09. Didn't I participate in the economy recovery as the legislation implies to. Please comment if you know the start date of the $6500 tax credit.

Faye

November 23, 2009 11:58 PM

If we owned a home for 7 years, but lost it in bankruptcy due to my husband having major surgery and not being able to work his current profession any longer, do we still qualify for the $6500.00 credit? It has been over a year since the bankruptcy ended. Thank you.

dudeman

December 6, 2009 12:57 PM

CAN ANYONE TELL ME IF WHEN THEY SAY "TAX CREDIT" THEY MEAN -$8000 ON THE YEAR'S INCOME, OR +$8000 MONEY IN THE BANK??!?!? THANKS

LRox

December 16, 2009 9:49 AM

1. Faye: the "move-up" credit of $6,500 for existing homeowners providing they owned & lived in their current home for 5 consecutive years of the past 8 years prior to purchase. Assuming you buy in 2010, you needed to have lived in the home for at least 5 yrs. (it appears you did from 2001 - 2008 for a total of 7), since 2002. Since from 2002 to 2008, you lived in the home for 6 consecutive years in the past 8 and would qualify.

2. Dudeman, Shannell: It is a credit (as opposed to a deduction) so will you see it offset against any tax you owe (e.g., if you owe $1000 and were entitled to the $8K credit you would get a $7K refund; if you were already entitled to a $500 refund without the credit, with the credit you would get $8500).

Tanya

January 12, 2010 1:53 AM

I know some concessions have been made for military members, but I was wondering if they allowed military to own/live in their current home for less than the 5 years? My husband and I had to relocate from NY to VA so we sold our house we owned in NY for 4 yrs and bought a house in VA. We had no choice but to move to another state. Is it possible for us to get the credit? Thank you

gina

January 13, 2010 12:38 AM

i built a new house in 2005 and am just finding out about all this tax credit stuff. I was wondering if i was eligible for any rebate or credit that i may not have been aware of then. this is the first time i have owned a home.

Mike

January 20, 2010 5:09 PM

Hud Dates

Settlement: Nov 6, 2009
Disbursement: Nov 9, 2009

the only grey area on my eligibility is the dates... Am i eligible for the $6,500 repeat home buyer tax credit?

jocelyn hunt

January 30, 2010 5:31 AM

My husband and I are repeat home buyers as of december 2006. The new construction home is 3 years old. Do we qualify for the tax credit as a move-up repeat buyer

jocelyn hunt

January 30, 2010 5:31 AM

My husband and I are repeat home buyers as of december 2006. The new construction home is 3 years old. Do we qualify for the tax credit as a move-up repeat buyer

jocelyn hunt

January 30, 2010 5:31 AM

My husband and I are repeat home buyers as of december 2006. The new construction home is 3 years old. Do we qualify for the tax credit as a move-up repeat buyer

MARCIA

February 3, 2010 1:37 PM

I closed on my house in September 2009. I lived my previous residence from nov. 1998 till June 2007. I sold it in Nov 2007. Would I qualify for the new home buyer tax credit?????

Melissa

February 4, 2010 2:10 PM

My husband and I bought our home in October 2007. We were both first time home owners. Am I correct in thinking that we don't qualify for any credit based on our closing date?

Melissa

February 4, 2010 2:10 PM

My husband and I bought our home in October 2007. We wew both first time home owners. Am I correct in thinking that we don't qualify for any credit based on our closing date?

Julie

February 19, 2010 10:00 PM

I was a first time home buyer in 2003. Due to a job loss I sold my home after being in it for just under 5 years.(3 months)

It appears I am not eligible for any of the tax credits if I buy a home now? Is this correct?

Donna

February 20, 2010 5:19 PM

Here’s a twist I can’t seem to find the answer. I own a different home, a moble home where I pay a lot rent, in-between my 5-year home and my new home, all within the last 8 years. And I still co-owner of the first home. I don’t see anything that says the 5-year home has to be the most recent house. I can’t decide if I should quailify?

Donna

February 20, 2010 5:19 PM

Here’s a twist I can’t seem to find the answer. I own a different home, a moble home where I pay a lot rent, in-between my 5-year home and my new home, all within the last 8 years. And I still co-owner of the first home. I don’t see anything that says the 5-year home has to be the most recent house. I can’t decide if I should quailify?

Donna

February 20, 2010 5:24 PM

Here’s a twist I can’t seem to find the answer. I own a different home, a moble home where I pay a lot rent, in-between my 5-year home and my new home, all within the last 8 years. And I still co-owner of the first home. I don’t see anything that says the 5-year home has to be the most recent house. I can’t decide if I should quailify?

Donna

February 20, 2010 5:27 PM

Here’s a twist I can’t seem to find the answer. I own a different home, a moble home where I pay a lot rent, in-between my 5-year home and my new home, all within the last 8 years. And I still co-owner of the first home. I don’t see anything that says the 5-year home has to be the most recent house. I can’t decide if I should quailify?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

Matthew

February 21, 2010 7:37 PM

I lived in my first home for 6 years sold it in may 2009. I had a new house built and moved in september 2009. Do get the 6500$ or am i SOL?

vera

February 23, 2010 2:21 PM

i still own and have lived in a mobile home since 2003, in march 2009 i bought a house and rented the mobile home now trying to sell it. my accountant says i am not entitled to any of the tax credits, i still find that hard to believe

vera

February 23, 2010 2:21 PM

i still own and have lived in a mobile home since 2003, in march 2009 i bought a house and rented the mobile home now trying to sell it. my accountant says i am not entitled to any of the tax credits, i still find that hard to believe

vera

February 23, 2010 2:21 PM

i still own and have lived in a mobile home since 2003, in march 2009 i bought a house and rented the mobile home now trying to sell it. my accountant says i am not entitled to any of the tax credits, i still find that hard to believe

Todd

February 28, 2010 8:49 AM

Do you know if there is an exception for the 5 year requirement for active duty military. Typically we are required to transfered every three to four years to a different location. Here are the dates of purchases and sales of my houses. Jan 00 - Nov 04, Dec 04 - Jul 09, Aug 09 - Present. Am I eligible for the 6500 tax credit?

Todd

February 28, 2010 8:53 AM

Do you know if there is an exception for the 5 year requirement for active duty military. Typically we are required to transfered every three to four years to a different location. Here are the dates of purchases and sales of my houses. Jan 00 - Nov 04, Dec 04 - Jul 09, Aug 09 - Present. Am I eligible for the 6500 tax credit?

Allison

March 1, 2010 1:33 PM

Do you know what I can do to qualify for the repeat buyer's program if I signed the closing documents at 7PM on 11/06/2009....

Tracy L

March 17, 2010 6:32 PM

My husband and I have a contract to buy a new house and we close on May 24th. Must we sell our current house that we have owned since 2000 in order to get the 6500 tax credit? We qualify for all the other numbers. Would we be able to keep our existing home and make it a rental?

Linda M.

April 11, 2010 11:56 AM

My about-to-be-divorced (decree will be final before closing)buyer client has a similar situation to Donna, who posted in February. As a married woman she co-owned and occupied one home as her principal residence from 2002 thru most of 2008, so over 5 consecutive years of the last 8. She and her now-ex-husband sold that home and purchased another, which she co-owned and occupied as her primary residence for one year only (2008-09). Does she qualify for the repeat buyer tax credit for the home that was her principal residence for over 5 years 2002-2008 despite the "intervening" home she co-owned and occupied for only one year in 2009?

michele whitlow

April 18, 2010 11:17 PM

bought our home in december 2006.Do we qualify for a tax credit,income combined between myself and my husband is no more than 65,000,really could use some help!

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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