$6,500 Existing Homebuyers Credit

$6,500 home buyer tax credit

Long time resident of the same main home credit by the IRS – supplements the popular $8,000 credit for first-time purchasers. Owners of existing homes – specifically taxpayers who have occupied the same property as a principal residence for any five consecutive years during the previous eight years – may not be able to claim a tax credit on a purchase of another house they intend to use as a principal residence.

The credit is for up to 10 percent of the price of the replacement home, capped at $6,500. The purchase contract must be dated anywhere from Nov. 7, 2009, to April 30, 2010, and the closing must occur no later than June 30, 2010. Members of the armed forces and federal diplomatic and intelligence personnel stationed overseas get an extra year to claim the credit.

The maximum purchase price on houses eligible for the credit is $800,000.

Purchasers are not required to sell their previous house, but they must be able to demonstrate that the replacement house they buy is or will be their principal residence.

Before making any buying decision, have your legal/tax advisor verify the most current rules.

San Diego California attorneys