In the past week this blog has been inundated with questions about the revised First-Time Homebuyer Credit. Although the explanation of the credit seems simple enough, as always the devil is in the details. There are many individuals whose situations don’t fit neatly with the government’s description of the credit, and more clarification is needed.
The most frequently asked questions pertain to the definition of a first-time homebuyer. Examples of this type of question include:
* If one partner of a recently married couple has owned a condo within the past 3 yrs, and the other has not, are they able to take half the first-time home owner credit from the 2009 stimulus bill?
*If 2 single people buy a house together and one is a first-time home buyer can that person get the 1st time homebuyer credit?
*How about a couple, one of whom is a first-time home buyer, the other who purchased and owns a condo, purchased prior to marriage?
*If the son is a first time home buyer and purchased a house together with the father who owned property. Does the son still qualify for the $8,000 credit?
The definition of a first-time homebuyer, found through the National Association of Home Builders website, states:
"The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer."
You may find answers to more of your questions on a page dedicated to the First-Time Homebuyers Tax Credit at the NAHB website. We’ll continue to watch for more detail on the credit.
The author is solely responsible for the content.