Here are a few details we learned about the first time home buyer tax credit from Jared Chatterton of Dorigatti Consulting at Cornerstone’s Office Meeting this morning.
There can be Co-Signers – Having co-signers on loans does not disqualify first time home buyers from receiving the full amount of the tax credit. However, it is only actually the first time home buyer that can qualify for the credit, not other owners of record who have previously owned before. For example, if a college student co-signs on a mortgage and holds title with their father, they are still eligible for the $8,000 tax credit as long as they meet the criteria.
You Can Own a Property and Still Qualify as a First Time Home Buyer – People who own properties, that aren’t living in them as their principle residence can qualify for the $8,000 first time buyer credit, as long as they haven’t been living in the residence they’ve owned for three years, if they purchase a new home that will become their principal residence. So, if you own a home that has been a rental for at-least three years, and you have been a renter, or lived with your parents, for at least three years, then you still qualify as a first time home buyer for this tax credit.
Fixer Uppers Don’t Have to be Moved into Before Expiration – If a home has been previously owned, for tax reasons the day of purchase is considered the day of occupancy. So even if someone needs to fix up the home before they move in, it can still qualify for the home buyer tax credit even if they don’t move in during 2010. Rules are different for new construction homes where buyers must take possession of the homes by the expiration of the tax credit.
Multi-Family Properties can Qualify– Duplexes, Triplexes, and Fourplexes can still qualify for the first time buyer tax credit. However, they only qualify for the credit based on the percentage they actually live in. So if a person purchases a $100,000 duplex and live in half of it, they are eligible for $5,000 tax credit. The owner occupied portion of the multi-family property would be worth $50,000, and hence the buyers would be eligible for up to 10% of the property value. As long as the owner occupied portion is worth $80,000, the home buyer can qualify for the entire portion.
The Move Up-Credit does not Require Selling Your Existing Home – For the $6,500 “move up” credit, it doesn’t matter if you sell your house or not, as long as the new house you move into will become your primary residence.# Marriage presents big obstacles for tax credit eligibility. For Utah Real Estate, marriage imputes ownership. It doesn’t matter if the spouse owned a home before. If a marriage happens and only one spouse owned a home, but the other didn’t, and they purchase a home in the non owners name, they still cannot qualify for the first time buyer tax credit unless the non owner purchases the new home by themselves before they get married.