If you are looking to buy your first home in the near future, it is likely that you have heard about the first time home buyer stimulus program which offers you a tax credit of up to 10% on the purchase price of your home (up to $8000) if you purchase by April 30th of next year. You are probably also familiar with the basic qualifying criteria like not having purchased a home as your "primary residence" in the three years prior to your current purchase and being within certain income limits. There are, however, certain lesser known restrictions and exceptions surrounding the regulations that could impact your eligibility. Failing to be aware of these provisions could result in an unpleasant experience with you being denied the credit or required to repay it. Conversely, if you meet certain conditions, the law may make certain exceptions that allow you to receive the credit even if you normally wouldn't qualify.
Firstly, you must keep in mind that this program is designed to assist genuine first time home buyers who are purchasing a home as their primary residence. House flipping is not encouraged. The law requires that you maintain the home you buy as your primary residence for at least three years following your purchase. If at any point during that period your home ceases to be your primary residence (such as if you decide to sell it), then the credit must be repaid. Exceptions may apply to members of the armed services, intelligence community, and the Foreign Service who are under government orders for extended duty service. Next, you do not qualify for the credit if you bought the home from a close family member such as spouse, parent, grandparent, or child. You also cannot claim the credit if you are a minor or non resident alien. Residents living in the District of Columbia who have claimed the Washington D.C. first time home buyer credit also do not qualify. There is some good news for you, however, if you are a member of the armed services, Foreign Service, or intelligence community serving overseas. If this describes your current situation, then you have an additional year to purchase your home. This means that you have until April 30th, 2011 to enter into a binding agreement and until June 30th, 2011 to close on your purchase.
Although the basic qualification criteria surrounding the first time home buyer credit are relatively simple, the devil does indeed lie in the details. Make sure you avoid disappointments and missed opportunities by doing all your research and staying up to date on the latest developments.
Firstly, you must keep in mind that this program is designed to assist genuine first time home buyers who are purchasing a home as their primary residence. House flipping is not encouraged. The law requires that you maintain the home you buy as your primary residence for at least three years following your purchase. If at any point during that period your home ceases to be your primary residence (such as if you decide to sell it), then the credit must be repaid. Exceptions may apply to members of the armed services, intelligence community, and the Foreign Service who are under government orders for extended duty service. Next, you do not qualify for the credit if you bought the home from a close family member such as spouse, parent, grandparent, or child. You also cannot claim the credit if you are a minor or non resident alien. Residents living in the District of Columbia who have claimed the Washington D.C. first time home buyer credit also do not qualify. There is some good news for you, however, if you are a member of the armed services, Foreign Service, or intelligence community serving overseas. If this describes your current situation, then you have an additional year to purchase your home. This means that you have until April 30th, 2011 to enter into a binding agreement and until June 30th, 2011 to close on your purchase.
Although the basic qualification criteria surrounding the first time home buyer credit are relatively simple, the devil does indeed lie in the details. Make sure you avoid disappointments and missed opportunities by doing all your research and staying up to date on the latest developments.
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