Do You Qualify for the First-Time Homebuyers Credit?

Update: First-Time Homebuyers Credit has expired.

As most of you know, the first-time homebuyer’s credit has been extended to the end of April 2010. This is great news for Portland home buyers. But the question is: who can get the credit?

The good news is that more buyers are eligible now than before. Even better news is that if you buy a home in 2010, you can claim the credit in your 2009 return. That means up to an $8,000 credit on last year’s tax return. Very cool.

Here is a summary of who can take the credit:

• Purchase must be your principal residence and you must live in the home for at least three years. If you sell or move before that, you must pay back the money to Uncle Sam. If you live in the home for over three years, the money is yours to keep.
• Must not have owned a home in the previous three years. If you have owned a home for the last five years and are buying a new home, you can still get a credit of $6500. Not bad.
• Married couple cannot have more than $225,000 adjusted gross income, and others cannot have more than $125,000 adjusted gross income.

Here are tidbits that are interesting about the credit:

• You can take the credit if you buy a mobile home with land.
• You can buy a home with seller financing (contract for deed, installment land sale contract, or long-term land contract).
• You can buy a duplex, but you can only get credit for the unit that you live in.
• You only need to be in a contract by April 30. You still have until July 1st to close.
• If you buy in 2010 (before the deadline) you can claim the credit on you 2009 taxes.

If you are thinking about buying a house this year, do not procrastinate. The credit will be gone before you know it.

I am not a tax expert or accountant and this is not tax advice, just an overview of the credit. Always seek tax advise from a professional  accountant. For more details about the credit, please go the IRS webpage about the credit.