By now most have probably heard that Congress passed an extention of the $8,000 tax credit for people who buy a home and have not owned one in the past 3 years. Most call it the "first time buyers' credit even if that is not entirely accurage.
Here's a list of the relevant changes in the extension that were not all present in the original one.
- Extends the deadlines for purchasing and closing on a home.
- Creates a credit for existing homeowners who buy a new principal residence.
- Raises the income limits for those claiming the credit.
Here's a few common questions people have had:
Question: If I've already purchased a home in 2009 can I apply for the credit now or do I have to wait until I file my 2009 tax return?
Answer: You have two choices; you can either file an amended return for 2008 or just wait until 2009 and claim it then.
Question: I'm in the process of buying right now but have not closed on the purchase. Can I get that credit now so I can use it for a down payment?
Answer: Nope, sorry, you have to actually own the home (have closed) before you can qualify for the credit. However if you live in the state of Tennessee we have a solution for that problem. Our state mortgage funding agency, the Tennessee Housing Development Authority (THDA) will make you a second mortgage of up to $8,000 that you have to qualify for in addition to your new first mortgage which can give you the cash you need to use for a down payment now. You can buy your house, collect the $8,000 tax credit, and then payoff the second mortgage from THDA. I suspect other states have similar programs.
Question: Will I ever have to pay back any of the $8,000?
Answer: Not in most circumstances, there is one exception however. If the home you buy and claim the tax credit on stops being your principal residence anytime within 36 months (3 years) of the date of purchase you would then be required to repay whatever portion of the credit you had collected.
Question: I noticed the extension provides that existing homeowners can also claim a tax credit if they buy a replacement home anytime after November 6th, 2009. I've tried to sell mine and can't so we rented it. Could I still qualify for the $6,500 credit?
Answer: Yes you can. Existing homeowners do not actually have to sell their current home in order to qualify for their credit. The only requirements are that the house you buy be your new principal residence and that your former residence had been your principal residence for any 5 of the past 8 years.
Please call or email with any more homebuying questions.
Browse all of the homes for sale in the greater Knoxville area at www.KnoxvilleHomeCenter.com
