As if the First Time Home Buyer Tax Credit wasn’t confusing enough, legislators had to make the Tax Credit For Existing Home Owners just as confusing, that’s just how things are done when making laws. For example when the changes rolled out a few weeks ago I was informed that the current home had to be sold in order for the existing owners to receive the tax credit. I found out this morning, in an e-mail from Ohio Association of Realtors, that the current home CAN be used as a rental property or second home.
Here is the infomation included in the e-mail from OAR:
How does a current home owner qualify for the $6,500 credit?
Buyers must have lived in their homes for at least five out of the last eight years. The home they buy must become their primary residence, but buyers don’t have to sell their previous home. They can use the previous home as a rental or a second home and still claim the credit.
Does the new home have to be more expensive than the one the buyer currently owns?
No. It is fine to use it to downsize. If the property sells for more than $800,000, the buyers don’t qualify.
Can buyers who are building a new home claim the credit?
Yes, although the contract must be in place by April 30 and the buyer must move in by July 1
Can buyers claim the credit if they purchase a home from a relative?
No. The legislation prohibits taxpayers from claiming the credit if the sale is between “related parties,” including parent, grandparent, child, or grandchild.
Each situation is different, each home purchase is different than the last. If you have questions as to how these tax credits will effect your purchase of a new home feel free to call, tweet or leave me a message on FaceBook. I would love to hear from you.
