Can you claim the $8k tax credit on your 2009 returns for a house you bought in 2010? Do you need to be a current homeowner in order to claim the new ‘existing homebuyers’ credit? The answers may surprise you.
According to this IRS info sheet on the homebuyer tax credits, “The credit for homes purchased in 2010 can be claimed on either the 2009 or 2010 tax return.”
Additionally, according to the IRS, “you do not have to own a home at the time you make your new purchase. But you must satisfy the criteria for having owned and lived in a home as your primary residence for a five-consecutive year period that falls somewhere within the eight-year time frame that ends on the date you buy the home on which you are claiming the credit.
Thus, if you make a qualifying home purchase on Nov. 30, 2009, the eight-year period would run from Dec. 1, 2001, to Nov. 30, 2009. If you bought your previous home on Nov. 1, 2003, and continued living in it as your main home until at least Oct. 31, 2008, you will meet the five-consecutive year requirement. In this situation, you will still qualify for the credit even if you didn’t own a home from Nov. 1, 2008, to Nov. 30, 2009, but you instead, for example, lived in a rental home during that period.”
as always, check with your accountant or tax professional before filing.
This article details the changes ahead for buyers using FHA loans. Most significantly: a greater downpayment will be required for buyers with credit scores below 580. Changes take effect in the spring.
As we enter 2010, I realize how quickly the past year has gone! In the Bloomington area the real estate market was far better than one might think from listening to the national coverage. Always a local business, real estate in 2009 was more local than ever, with big differences from one neighborhood to another.
With fixed rate mortgages hovering around 5% those who bought in 2009 got excellent long-term financing. Although it is interesting to note that many buyers paid cash, perhaps thinking that a home is still a safe place to put money and a good investment too.
Besides the $8,000 refundable tax credit for first-time buyers (defined as those who have not owned a house in the past three years), there is now also a $6,500 tax credit for those homeowners who buy another house! You can keep the first house or sell it, as long as you move into the new purchase. I expect to see more long-term homeowners downsizing in 2010 as well as people who need more space buying up.
Finally, I know that we will continue to have homeowners unable to pay mortgages. What began as foolish lending has now extended to employment problems: long layoffs and job losses. In October, 2008, I spent three days in Orlando with the Certified Distressed Property Institute, gaining the CDPE designation. If you know of anyone having a problem making payments, please ask them to call me. There really are better alternatives than letting a house be foreclosed. Nationally the statistic is that 80% of homes that go to foreclosure go with no visible intervention at all. What a pity! It really is a community problem and together we can make a real difference!
Bloomington, Indiana is a dog-friendly town. In addition to its numerous parks and trails and dog-oriented services, we also have our annual “Drool in the Pool” event in September, when the Bryan Park public pool dedicates its last day of the season to man’s best friend. You’ve never seen anything like dozens of dogs, swimming like otters, through the the deep end of the pool….
We at Jeanne Walters Real Estate are offering this blog to our community as a way to tap into local happenings and learn about Bloomington, Indiana real estate and other housing news. Stay tuned for updates!
–The Jeanne Walters Team