Also referred to as the Homeowners $6500 Tax Credit follows all the same income and qualifying date requirements as the FTHB1 tax credit. This credit is intended to be used for new buyers in the market that have owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. If it is a married couple, both spouses must qualify as long-time residents, with at least five years of principal residency for each.
Repeat or Move-up buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit. So I am not really sure how it ever got the “Move-Up Buyer” name.
I believe this Repeat Buyer Credit was created for 2 primary reason:
- Those that suffered a foreclosure or short sale 2-3 years ago, and have now been able to rebuild their credit score to be able to acquire a mortgage once again.
- For those that were unable to sell a home when the market was really depressed and have now been able to because of the increased traffic from buyers, and lenders lending.
I really like #2 — But, it sure would have been nice for Sellers to have had this all last year, OR for myself as a real estate agent would be nice if it was lasting longer so more owners would list Spring of 2010, but the extension really is not long enough for a homeowner to expect to just now hit the market, go under contract and find a new home without having the contingency of needing to sell their existing home all before June 30th of 2010 — That is far too many balls in the air.
It is also my belief this Homeowners Tax Credit will be where most of the new fraudulent claims will occur, or the inquiries of how to get around the requirements. I predict a lot of cases where both buyers may not legitimately eligible whether it be from Divorce, Separations, Brand New Relationships and so on…
In closing, overall the tax credit extension is exactly what I was looking for, a short extension to get us through the slower selling season of Winter. Keeping the money moving and flowing through the banks, mortgage companies, title companies, REALTORS, appraisers, home inspectors and Buyers and Sellers. Because if money is not at work and sitting stagnant a true recovery cannot happen.
I am a firm believer that getting unemployment and under-employment in check is key for a long lasting recovery, but I would much rather the US Government issue tax credits for those who deserve them rather than more bank2 and automobile manufacturers bailouts. Don’t get me wrong, it makes me sick to hear about those that received a FTHB Tax Credit under false pretenses and committed fraud with my tax payer money, but as a real estate agent that is honest and performs his job with integrity, I can sleep comfortably knowing I was not part of or had any of my clients abuse and take advantage of the $7500 or $8000 tax credit.
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