Home Buyer Tax Credit Series #9 – Qualifying Residences

This is the ninth in a 12-part series of weekly posts on the 2009 Home Buyer Tax Credit. To see all the posts in this series, click here.

If you are a first-time home buyer purchasing a principal residence – defined as the one in which you live most of the time – you will be eligible for a refundable tax credit.

The key term in the 2009 tax credit stipulations is principal residence. This means vacation and rental properties do not count because you do not spend the majority of your time living in these types of homes.

Types of Homes Covered Under the 2009 Tax Credit:

If the property you purchase is your principal residence, the type of property is not restricted in any way. The following are all types of residences that qualify for a first-time home buyer tax credit:

• Condominiums
• Townhouses
• Houseboats
• House trailers
• Manufactured mobile homes
• Single-family detached homes

Exclusions:

There is an important exclusion from the tax credit: the seller of the home cannot be related to the buyer in any way. This includes children, grandchildren, parents, grandparents, your spouse, and your spouse’s family. If you have questions about whether or not someone falls under the “relation” category, check with your tax advisor to make this determination.

Building a New Home:

If you plan to build a new home on land you already own, you can still qualify for the first-time home buyer tax credit, but the requirements will differ slightly. Generally, the tax credit will be based on the date the contract is signed. The day the buyer takes occupancy of a new home constructed on existing property is considered the date of purchase.

Binding sales contracts must be signed by April 30, 2010; date of occupancy for a home being constructed has a deadline of June 30.

You can find out more and download a free guide to tax credit information by clicking the following link:

2009 Home Buyers Tax Credit Guide-HS-1