FAQs on Tax Credits for Buying Homes for Sale in Southeast Michigan
Posted in Homes for Sale Southeast Michigan by Michigan Real Estate Expert on February 15th, 2010 Thousands of potential buyers of homes for sale in Southeast Michigan are now homeowners, thanks to the first-time homebuyer tax credit. You could be eligible for a tax credit if you bought a home in 2009 or plan to buy one before April, 2010. But which one are you eligible for?
If you have two or three hours to spend reading the information about the homebuyer tax credit, you’ll be able to figure out if you’re eligible. But, most people don’t have the time or patience. To shorten your learning curve, here are a few tips, pointers and frequently asked (and answered) questions about the tax credit:
Three Kinds of Homebuyer Tax Credits
There are actually three kinds of tax credits:
- The original first-time homebuyer tax credit, enacted in 2008, covers the homes for sale in Southeast Michigan that went off the market between April 9, 2008 and June 30, 2009. Rather than being a true credit, the money received is actually a 15-year, interest-free loan. In other words, it has to be paid back.
- The second tax credit, raised from a maximum of $7,500 to $8,000, doesn’t have to be paid back. If you bought a home between January 1, 2009 and November 30, 2009, you may be eligible.
- The third homebuyer tax credit, enacted in November 2009, is actually an expansion and extension of the second credit. It extends the deadline of November 30, 2009 to April 30, 2010 and expands the credit to include long-term homeowners who want to buy a new residence.
Tax Credit Qualifications
Just because you buy a home between April 9, 2008, and April 30, 2010, doesn’t mean you automatically qualify. Each homebuyer tax credit has its own eligibility requirements. For instance, the home has to cost less than $800,000, if bought after November 6, 2009. Long-term owners have to have lived in the same home for five consecutive years of the past eight. There are also income requirements, as well as other factors.
Automatic Ineligibility
To receive the homebuyer tax credit, there are a few things you absolutely cannot do. For example, the home you buy has to be a principle residence, which means it’s the one you live in most of the time. You can’t buy it for business. As well, the home you buy has to be in the U.S.
Another “can’t do” is selling the home or converting it to rental property. You have to live in the home as your permanent residence for at least three years. If you don’t, Uncle Sam will want the money back.
There are many great homes for sale in Southeast Michigan, and one of them might just be your dream home. However, if you plan to purchase and claim the homebuyer tax credit, make sure you know the facts first.
Have questions about the homebuyer tax credits? I can help. Call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.
Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call: 248-514-2640
