$6500 home-buyer tax credit for current homeowners

$6500 tax credit for home buyers

Apparently all the talk about the $8000 first-time homebuyer tax credit being extended and expanded is coming to pass. According to a USA Today article

“Senators agreed to extend the existing tax credit for first-time home buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years”

Obama seems to be fully behind the extension of the tax credit, so it is will likely be finalized very soon. The proposed bill would extend the current $8000 tax credit for new homebuyers from it’s current end date of November 30th, 2009 to April 30th 2010.

$6500 tax credit for home buyersA different type of deadline

Just to clarify, they are discussing changing how the credit deadline works. Currently, you have to close on your home purchase by November 30th to be eligible. But under the new plan…

“The Senate agreement stipulates that buyers must have a sales contract on a house by April 30 to be eligible, but it gives them an additional 60 days to close the purchase. Looked at one way, the effective deadline of the credit under this agreement is actually the end of June.” (USNews)

Rules for current homeowners

As mentioned above, it would also allow current homeowners to get in the game by offering them $6500 if they have been in their current house for at least 5 years.

“The current credit prevents home buyers who have owned a primary residence within the past three years from claiming the credit. The agreement, however, would allow current homeowners to claim up to $6,500 as long as the property they are vacating has been their primary residence for at least five years.”

If you are a current homeowner looking to get in on the $6500, it would likely have an effective date of December 1st, 2009.


Income restrictions

As with the first round of the credit, it is not open to higher-income earners. It is open to higher earners than the first round (originally it was $75,000/single and $150,000/joint). Single filers making more than $125,000 and married couples making $225,000 or more aren’t eligible either. And if you have been eye-balling a million dollar house, that isn’t eligible either.  “Homes that cost more than $800,000 aren’t eligible for the credit.”

A few other points about the credit worth mentioning…

  • You can’t use the cash to buy a vacation home. Only primary residences are eligible.
  • Also you must be at least 18 years old to be eligible. Doing the research for this article I found a story of a 4 year old that claimed the credit.
  • The current tax credit has cost taxpayers about $8 Billion. And BusinessWeek estimates that the new one will cost us $10.8 billion.

So if you are are a current homeowner – is $6500 enough to get you thinking about buying another house?



















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194 Comments
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  1. Oh my gosh. I hope this doesn’t pass.

    I don’t think this is actually helping the economy. If people couldn’t buy a house unless the government gave them $8k or $6500, maybe they shouldn’t be buying a house to begin with.

    This is just going to cost taxpayers too much in the long haul.

    I’m a renter, and the extension of this wouldn’t get me into a house faster.

    • @Kacie,
      While I agree, we (the taxpayers) are going to be paying for this for a while, it sounds like this one is fully-endorsed by Obama, so there is a very good chance this will become a reality very soon…

  2. Great – we sold our house and moved out just before the 5 year mark and are now living w/ in-laws as we build a new one – I’m guessing I’ll somehow get hosed out of this credit! =) Hopefully not. Thanks for the update!

  3. All I can do is shake my head about this.

    This Washington Post article pretty much sums up my thoughts on the homebuyer credit.

    • Yea, it seems that the US Government has been becoming better at throwing good money after bad…

  4. Not only has the government thrown good money out for bad for a very long time, but $6500 won’t even come close to what this government created bad economy has done to our home values. I wish Obama could write me a check for all I have lost due to bad government decisions!

  5. You states that the new income limit for the couple is $225,000. But I read somewhere that it is $250,000. So which one is it? Thanks for confirming this.

  6. I’m not so sure this is a good idea. To some degree I feel like we’re re-inflating that real estate bubble – and any increases in the real estate market that we see now – we’ll have to pay for it later.

  7. when will long standing homeowner get a tax credit for being a homeowner

  8. Ridiculous idea. Where in the Constitution does it state that the US government is responsible for co-funding the purchase of a homes for its citizens (or cars, for that matter)? And then why not also clothes, computers, furniture, leisure travel, etc.? The logical end result is “to each according to his needs, from each according to his ability” and that’s a very dangerous place to be heading.

  9. cassandra legrand

    would this tax credit apply to those that own a mobile home as well

  10. The article is not clear…can a current homeowner elect to turn their primary residence into a rental property and buy a new residence taking advantage of this new credit? Anyone know a good link to all the rules? I do not want a second property as investment…a personal family crisis has prompted the need for another residence…this would be timely.

    I will use the stimulous simply because it would be getting back a little of my own tax $$$…but incresing debt personally or governmentally will not serve to FIX the economy…that actually caused the problem…it caused a false bubble that burst.

  11. susan davis

    i have a home that i own but it is leased out for over 6yrs now, so i dont qualify for the first time home buyer of 8000 because i still own the home and its still in my name, so will i qualify for the 6500 tax credit since i am still the owner of the home?

  12. So just to clarify – we had been in our previous home for 7 years and bought new in July of 2009. We won’t qualify for th e 6,500 tax credit because it is not coming into effect until after Dec 2009.

  13. Like the post above (Shanna) we lived in our home for 9 years, and bought in April 2009. As long as the purchase occured in 2009 do we qualify for the $6500? Does the bill retro all 2009 transactions within the other parameters?

  14. From what I understand to qualify for this credit the home you own has to be your primary residence. If you have it rented or leased it wouldn’t qualify for the credit.
    What I need to know if someone could answer for me is this:
    My husband has owned a home for the past 16 years, so he would qualify for the $6500 credit, but I have not owned a home for the past 10 years, so would I qualify for the $8000 credit since both of our names will be on our new house?

  15. @ patty,
    if you get the loan in your name you will get the $8000
    if he gets the loan in his name he will get the $6500
    so just get the loan in your own name and you can both be on the deed to the house itself.

  16. Any idea of when the 6500.00 tax credit will be passed? We close on a “used “house December 1,2009.

  17. Our house is currently on the market, but will probably come off in a couple weeks. We’ve been looking to move, but will wait until spring.

    If the tax credit is there, we will qualify and we’ll take advantage of it. But I’m not sure it’s good for the country.

  18. You can lease your current home and purchase a second one and qualify for the $6500.00..The home you live in must be the new purchase…

    The $8000.00 credit was different…you could not have owned a home at all within the previous three years…

    This second credit makes room for people who want to own more than one property…but again, one must be careful…the IRS will be watching to make sure you lease the current and live in the NEW one…

  19. Christina….if you buy a new one and live in it, the $6500.00 is yours and you can keep the current one as a rental…the rules don’t say you had to live in the first home I don’t believe…this second tax credit is to motivate people who own a home to buy a second one…

  20. Is this retroactive? We lived in our old house for 17 years and just bought a (brand) new house in Oct 2009. Do we qualify for the $6500?

  21. I owned a home during the past eight years, but I sold it in the summer of 2008. Then I bought a new home in March this year, am I qualified for the $6500 credit?

  22. Dave!
    Don’t feel so bad.
    I have lived my current house for 8 years and I will close on my new one next week. I losing $6500 because of 2 weeks short of Dec 1, 2009.

  23. So this is only good for home buyers that buy a house from 12/1/09 – 4/30/10?? I purchased a 2nd primary residence this year too and kept my first as a rental. I don’t qualify for this credit at all?????

    If not, people that took a stance to buy in this market get screwed????????

  24. Why isn’t the government helping people that need the help, the people that bought overpriced homes in the last five years are being entirely ignored for some reason. They are instead helping people who don’t need assistance. I bought my home a month before the tax credit came out and I haven’t owned for five years, why do they keep missing me?

  25. Greg…the markets are shifting and changing rapidly…those who bought 8 years ago and now find their property is at least 1/3 less in value can feel that way as well….those who bought this year and got, say my house, and I lost all my equity might make me feel like I got skrewed and make you feel like you got a deal!

    The point is…we all make our best decisions at the time…sometimes it turns out we should have waited, and sometimes it turns out we moved at the perfect time…personally I feel like I am getting screwed because my tax doallars are going to investers and first time home buyers when I did the right thing building good credit, saving my money and buying my home the old fashioned way and I get NOTHING…

  26. confused about this program.

    We just sold out house on September 11th after living there 12 years.

    We are having another house being built that we should occupy in mid-december. My question is does this program apply to us?

    If so, how do you claim it?

    Thanks.

  27. I am amazed at how we have become a society that believes the government is obligated to take hard working people’s tax dollars and try to make everything ‘right’ for everbody. This sense of entitlement is amazing…

    If your son plays football. They practice hard, they sacrafice to get ready for a game…they win…does his team need to make it right by spliting the score down the middle with the other team?

    That is the concept…people made bad deals…the best learning tool in life is experience and working our way out of a mess WE made…

    The markets did not fail for no reason…buyers and lenders both broke simple financial rules…now both want those who did not, to make that mess right for them…to make their bad decisions NOT cost them anything…

    this is wrong

  28. Francis,

    I purcahsed my 2nd home because my family grew and we could not reside in our old home. I then went to sell my 1st home and I saw it was worth 100k less then it was valued at one time. At that time, I made a choice to rent out the property till I could gain some of the equity back in hopes to pay for my kids college one day.

    I agree that timing is everything but I did buy my 2nd home during the “first time homebuyers credit” and now it has been modified I would enjoyed the $6500 to upgrade my current home. Since I won’t be receiving the $6500 I guess I will just need to wait to fix some stuff around the house. Somethings in life are not fair and I enjoy to vent about them every now and then. This will not destroy me though or get my upset with our government anymore then I already am :)

    Have a great week!!!:)

  29. As with others here, I’m trying to determine whether or not my wife and I would qualify.

    We lived in our old house for 9 years, sold it in August, and bought a foreclosure in September.

    If we don’t qualify, I guess that’s reasonable, just like Best Buy isn’t going to make a new rebate retroactive to something you bought 3 months ago, but it’d be fantastic if we did…

  30. rusty carnes

    we have owned our house for four years.And we have never been late on our payments.So why is the government not giving us some form of stimulas pay ment.We as well as a lot of americans could is a little help.Why are they giving money to first time home buyers and forgetting us.The government needs to help other people.But will the goverment help or not.I hope so but i doubt it.Will the goverment ever even read this.I dought it yet again.Signed a pissed off american,

  31. How about a tax credit for people who purchase vacant/foreclosed homes as their primary residence? That sounds like a proactive approach that would benefit the real estate industry, the banks and economy.

  32. How about a little help for the ppl who bought houses just before the whole housing market collapse.

    Wouldnt it be better if the banks lowered everyones interest rates on homes that have been occupied from 2-3+ years vs giving away all this money?

  33. Folks…the government has no money…all the money they USE is OURS…and what they borrowed from other countries that OUR money has to repay…

  34. Joe Example

    This sucks. We’ve owned our condo since September 2003; we just bought a house in June 2009. It looks like we won’t get the $6,500.

  35. Works for me, my husband was laid off in may,got new job in oct. We close on our current home nov 11 and can put off close of new home till dec 18. I’ll spend thanksgiving on a motel for $6500.

  36. Sweetpeascc

    We just sold our home and closed on it Nov. 2nd (just a few days ago) we lived in the house for almost 8 years before selling it. We are temporarily living in an apartment for 5-6 months till our new home is done being built. We should close on our new home around March-April. Does anyone know if the $6,500 tax credit would aply to us or are we out of luck since we closed on our old house before the bill has even been passed.

  37. I think this bill should be retro for all of 2009. We bought in May 2009. My boyfriend was a 2nd tinme homebuyer-but this was my 1st time applying as a home buyer-reason I missed out on the $8000 credit -we put my name on the deed of the house we shared together fo 7 years in 2005. Or I would have been a first time homebuyer! Now we both lose out on $6500 because we closed and bought a hosue too soon in 2009-May-it should be retro all of 2009. We are not high wage earners-and we helped drive the economy and bought a house inflated in price because we were competing with 1st time homebuyers at that time. All around we got the short end here—

  38. have a question sold my house in october (which we lived in for about 10 years) close on the new one in Dec. do i quailfy for the 6500.00 tax credit?

  39. We are homeowners that have lived in our home for >5yrs & are selling/buying a new home & are settling on Nov 20th so our buyers (1st time buyers) could get there tax credit (before we knew it would be extended), does anyone think we would qualify for the $6500 credit since our settlement date is in Nov? or does it not go into effect until Dec?

  40. how to calculate the 5 years?
    IRS can track to this? Only one day short is not OK?
    Because some months have 31 days, some have 30 days.

  41. for those of you who are wondering if this legislation will allow you to claim a credit for a house you already bought (assuming you already an existing homeowner), here is a link to the house bill: http://thomas.loc.gov/cgi-bin/query/F?c111:4:./temp/~c111KgZGqb:e16075:

    Notice the sec. 11 (j)(1):
    (1) IN GENERAL- The amendments made by subsections (b), (c), (d), and (g) shall apply to residences purchased after the date of the enactment of this Act.

    subsection (b) pertains to existing homeowners:
    (b) Special Rule for Long-time Residents of Same Principal Residence- Subsection (c) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: `(6) EXCEPTION FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.’.

    From reading this, it seems as though you would have to purchase a new principal residence after this act is passed into law.

  42. We close on the sale of our old home which we have owned 10 years on December 4, 2009. We put money down to buy a new home to be built last Septemeber but it does not close unitl end of February 2010. We meet the income requirement. Do we qualify for the $6500. tax credit?

  43. This new tax credit for current homeowners would’ve been great if it was effective 2 months ago cause my wife and closed early October. Bad timing I guess. However, we would have bought regardless as we we’re ready to buy as we saved enough for the 20% down (no thanks to goverment handouts) and have jobs that is able to pay for the monthly expenses including a mortgage. Anyone needing the $6.5K or $8K to buy a house may need to think long and hard as $6500 will only take you so far. I just hope the Obama and company know what they’re doing. Good luck and God bless.

  44. i HAVE OWNED MY HOME FOR 13 YEARS . dO i HAVE TO LIVE IN THE HOUSE i BUY USEING THE $6500

  45. the fair rule should be anybody to purchase a house and live in it as a primary residence will get $8000, investment property(second home, vacation home) will get $6500, return the credit if it is sold within 3 years

  46. We currently have a contract on a new principal residence and meet the other requirements regarding the 5 years and income. So do I understand that getting the $6500 credit is dependent on CLOSING the loan and having the title assigned to your name on or after Dec. 1? If so, we’ll absolutely reschedule our late Nov. closing date! I hope it doesn’t mean that the sales contract has to be signed Dec. 1 or later.

    (However, I certainly do not support the way Congress is just giving away money. But with the taxes we pay, I am happy to get a little back for a change.)

  47. The Congress operate at will.
    People bought in 2006 cannot get refinance, cannot get credit, cannot modify loan …….
    People sold in 2006 take sweet profit, get credit to buy 1/2 priced house.
    Wow.

  48. Guys..if you read the bill..

    http://thomas.loc.gov/cgi-bin/query/F?c111:4:./temp/~c111o2IILH:e16075:

    It says you qualify if you owned a home for 5 years in the past 8 years and are moving into a new residence after Dec 1. So, how I read it…if you sold your house as we did in August (lived in it for 5 years and 2 weeks!!! Seriously) and am living in apartment until we close on new house in mid december….

    how I read it…I qualify….dones’t say anything about ahve to sell your 5 year residense home after dec 1….

  49. Also..this article is a bit misleading…it reads:

    “As mentioned above, it would also allow current homeowners to get in the game by offering them $6500 if they have been in their current house for at least 5 years.”

    the bill does not say you ahve to be a current home onwer…

    “who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.’.

    See the difference?

  50. There is no wording on when a contract is “signed” as that mattering. It’s when you CLOSE that matters. I have a closing Dec 15th so I’m EXSTATIC!

    One piece does confuse me a bit on the wording

    “apply to residences purchased after the date of the enactment of this Act.”

    When is the “enactment”? Is it 12/1/09 as people are saying or does “enactment” start when the President signs the Bill into law?

  51. Hmmm…..I also read

    “In the United States of America a Bill is an enactment by Congress. It remains that until the President signs it. Then it becomes a Law”

    Wonder if this means the new home must be bought after TODAY?

  52. I’m getting conflicting reports as to when the $6,500 credit will kick in. The website realtor.org is reporting that it will go into effect as soon as the President signs the bill. Other sources such as the Washington Post are reporting that it will go into effect December 1st. Anybody know for sure? I’m a repeat buyer who is scheduled to close on a new house November 24th.

  53. Keith, we are in the same boat. If it is correct that “purchase” equals “closing date”, then I think we need to postpone closings until Dec. 1st.

    Here’s a link with a little info, although not the definition of “purchase”:

    http://realestateconsumernews.com/nar_chart_tax_credit_extension.pdf

  54. Thanks Jan. The chart is a little ambiguous and can be read two ways. Under “Effective Date – Current Owner” it reads “Date of Enactment”. To me that might mean it goes into effect as soon as the President signs the bill. This is what is posted on realtor.org.

    http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

  55. Oh, boy, the government likes to make things complicated. I am afraid to trust the pre-Dec. 1 date, but we’ll be paying some penalties to postpone until after Dec. 1. My realtor is still not sure we’ll qualify because our contract was signed prior to the bill. However, I have to believe that purchase means closing, don’t you?

  56. I would be quite surprised to see the definition of “purchase” be anything OTHER than closing. They even make a distinction on the April/June issue (signed by april, closed by june)

  57. Thanks, Paul. Logic would definitely be purchase=closing. It says you have to provide proof of “purchase” with your tax forms, and that would have to be a closing document, not a contract since not all contracts end up being completed.

    I guess the big question is whether we need to move closings to Dec. 1.

  58. Purchase means closing to me. To get the credit, you’ll need to attach your HUD-1 settlement statement. If I understand correctly, the only date referenced on this form is the closing date. The IRS would have no idea as to when you signed your purchase agreement (unless they ask for this form also).

  59. Okay, here is another statement that says the $6500 goes into effect when signed by the President:

    http://www.realtor.org/wps/wcm/connect/d336a1804033a163816af5205f470b6e/government_affairs_tax_credit_FAQs_110509.pdf?MOD=AJPERES&CACHEID=d336a1804033a163816af5205f470b6e

    Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a
    new home. I have lived in my current home for more than 5 consecutive years and
    am within the new income limits. I will go to settlement on November 20. If
    President Obama has signed the bill by the time I go to settlement, will I qualify for
    the new $6500 tax credit?
    Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment
    (when the bill is signed). There is no reference to the date of contract for the new credit. The
    provision looks solely to the date of purchase, which is generally the date of settlement.

  60. I tend to trust the information coming out of the NAR. After all, they are the ones who have been pushing hard to get this bill passed.

  61. That’s what I hope. The bill itself is confusing, though.

    j) Effective Dates-

    (1) IN GENERAL- The amendments made by subsections (b), (c), (d), and (g) shall apply to residences purchased after the date of the enactment of this Act.

    (2) EXTENSIONS- The amendments made by subsections (a), (f), and (i) shall apply to residences purchased after November 30, 2009.

  62. The conditions for the existing homeowners and new income rules are listed under (b) and (c). So I am very hopeful that the NAR is reading this correctly!

  63. Dan Hammel

    I wrote to congressman Frank yesterday to demand that the 6500 credit be applied to any purchase in 2009! I colsed on a home on 8-31-09 and want to be included in the credit. I urge anyone in the same situation to contact their representatives and make the same demand.

  64. Dan, I really sympathize with your situation. But I think the House and Senate have already signed the bill and it is supposed to go to the President today.

  65. lllttt November 5, 2009 at 2:43 pm
    how to calculate the 5 years?
    IRS can track to this? Only one day short is not OK?
    Because some months have 31 days, some have 30 days.

    I would say if you claimed the house on your taxes for 5 years, you are fine. I don’t think they are going to count days.

  66. To Dan Hammel–

    That’s nonsense.

    Look, as I noted above, I’m in the same situation as you–My wife and I meet the other requirements, and also closed on our new home in late August, so naturally I was hoping that we’d qualify and am bummed that we don’t.

    HOWEVER, “demanding” the credit is absurd. If you buy a new computer from Best Buy, and two months later they start offering a rebate on that same computer model, are you going to “demand” that they give you the rebate as well??

    The whole point of an economic stimulus is specifically to encourage people to get off the fence and buy a house to cut down on the foreclosure mess. You and I *already* bought a house (and in my case, it was indeed a foreclosure), so obviously we didn’t need the extra incentive. The point of the credit is to encourage those who *need* something to make the decision easier.

    It kind of sucks, but it’s hardly unreasonable. Some laws can be made retroactive, most aren’t. This one apparently falls into the latter category.

  67. Wow, Keith, I guess I am having trouble believing that we would be this fortunate to fall into this tax credit! But I’ll just consider it a real blessing and hope the economy doesn’t end up worse in the long run! Thanks for posting that! I’d be so happy not to have to postpone our Nov. 20th closing!

  68. Guys keep the dialogue going about the start date and anything you can find on the web. I close Nov. 10th, so needless to say, this is huge if it goes in effect today. I am still seeing articles stating Dec. 1st.

  69. Article from the UPI stating Dec. 1st is the start date, uggghhhhh….

    http://www.upi.com/Real-Estate/2009/11/06/How-the-New-Homebuyers-Tax-Credit-Works/4991257514845/

  70. I’ll say UGH!! to that, too! But I think they are wrong. I’ve seen several wrong things posted on various sites regarding this bill, so you really have to do research to find out what is true!

    I am not sure some of these people are reading the bill. Some of it goes into effect when the bill is signed, and it appears to me that the sections regarding the $6500 fall into that category.

    There had better be something very definitive posted about this quickly, though, so some of us will have the chance to reschedule closings if needed.

  71. To LMB –

    You wrote,
    “how to calculate the 5 years?
    IRS can track to this? Only one day short is not OK?
    Because some months have 31 days, some have 30 days.

    I would say if you claimed the house on your taxes for 5 years, you are fine. I don’t think they are going to count days.”

    Here’s my situation with my current house. I bought my current house in August 2005 and looking for a new house right now. My question is, If I purchase a new house in March 2010, will I qualify for the $6500 credit? If you count the days, I am only several months short of the 5 full years. Exactly how to calculate the 5 years? By March next year we would have claimed the current house on our taxes for 5 years… Thanks anyone can answer my question.

  72. Katricia

    Is there a starting date on when the 5 yr credit starts I mean would you have had to bought it 5 yrs from todays date (November 6, 2004)or 5 yrs from when the credit ends?(April 30, 2005) I am curious because we closed on our house May 24th 2005 ?

  73. Do we know for certain that we the “move up” plan goes into effect the minute the President signs it? I am reading it as an effective date of 12/1/09, as the “enactment” date for the whole package, which is the day after the other one expires.

  74. Katricia
    I hope someone answers your question. I am wondering the same thing. Also I was wondering if you bought your current home in 2005 and you bough the new one sometime in 2010, would that qualify?

  75. Well, this looks pretty official:

    http://www.jct.gov/publications.html?func=startdown&id=3621

    Effective Dates are on page 8. For the move up buyers:

    “Provisions relating to long-time residents of the same principal residence, and income, purchase price, age, related party, dependent, and documentation limitations apply for purchases after the date of enactment.”

    With the date of enactment being today I presume.

  76. I sold my house on Oct. 30th and close on my new house on Dce. 4th do Iqualify for the $6500 tax credit?

  77. And I had owned my previous house for over 5 years.

  78. Looks like it will apply to closings after Nov. 6th. IRS is beginning to update their webpage on this:

    http://www.irs.gov/newsroom/article/0,,id=204671,00.html

  79. Hello-

    I sold my old house that I have lived in for over 5 and a half years today and also closed on my bran new house today (11/6/2009) at 10:30 Central Time today (11/6/2009). I meet all of the requirements, so do I qualify for the 6500 dollar credit?

  80. Dustin Boss

    Ben..

    The bill reads if you owned your “current” home for 5 years in the past 8 years, (read the actual bill..see link below) you qualify if you buy a new home and close after dec 1–I am a little confused as to if it has to be after or before dec 1..

    Dustin

  81. Ben, as long as you meet the other requirements, you will be fine with a Dec. 4th closing. The uncertainty has been from Nov. 7 to Nov. 30. But it appears from the IRS site that they are considering that the new rules are in effect with the signing of the law.

  82. I bought a mobile home in 2003. The land it set on was my father’s. I bought a house in July, 2009 expecting to get the 8,000 rebate. My real estate agents assured me that I would qualify since the mobile home had not set on land that I owned. Do you think that a mobile home on land that was not owned by me is considered a “prior residence”?

  83. Tim…
    You should wait till Monday.
    It is official the law is effective from 7th of Nov.
    You lost $6,500 because of one day too soon!
    Thats Y I postponed my closing to Monday (9th) insted of Friday (6th).
    My title company asked if I could sign 11 AM of last friday.
    However, my realtor told me to hold it till Moday because Obama could sign the new law on the same day, so I did.
    You still have a hope.
    Ask the title company if they record your sale same day.
    If they did not, your official purchase date could be 9 th insted of 6 th.

  84. Lamanda -
    We also own a mobile home that is on a rented lot and at first we thought we would qualify for the 8,000, but we were told if you owned any principal residence whether it be a mobile home, houseboat…etc. you don’t qualify.

  85. k wilson

    I think its unfair I brought home march 28 of 2008, I donyt qualify for anything .the housing market was not in turmoil then.why dosent I get anything. There talking bout helping who live in home at least five years that sad I feel like if u cacant help all don’t help none. God doesent have a favorite so nether shoud the government!

  86. k wilson, do you get to deduct your mortgage interest on your taxes? Then that might not be seen as “fair” to people who rent and do not get to deduct their housing expense on their taxes. Any tax credits are going to be unfair to someone. The only way it would be more fair would be to change to a flat tax. But even then, there will be perceived unfairness depending on how the tax was structured.

    A general comment. For those who closed at the end of last week…..I wouldn’t be too happy if my real estate agent or attorney were not following this development and did not warn me to delay closing. However, we must be our own advocates even when others let us down. I read Wed. night at 11pm of the Senate passing their bill, and I immediately emailed my real estate agent in a panic. I received a reply back that said we needed to wait to see the final bill that is signed by the President and then delay closing if the date of effectiveness turned out to be after our closing date. And as it turns out, the effective date was when he signed the bill, so closing dates of Nov. 7th and after are safe.

  87. The mobile home that we owned was in my name only although my husband and I were married. So, technically his name has never been on a deed. Does he qualify for part of the 8,000 credit since he is a new home owner?

  88. Just one question. How does one APPLY for this credit?
    What forms are used ?

    Thanks

  89. I’m kind of miffed on this – we are closing next week and during negociations, we agreed to go higher in price because we were getting the $8,000 credit (they were playing hardball by pressuring a post Nov close date so we wouldn’t get the credit). Now the seller is going to get $6,500 on their new house purchase. I’m glad they are going to get the credit, but disappointed that the seller sucked us into a guilt trip by offering more on the house because of our $8,000 first time home buyer credit.

  90. Now that it looks like this extention is passing along with the credit for those buying a second home, I would like to voice something I think is not fair in the new lingo. There should be an exemption for our military members who are not allowed to live in one place for 5 years. We have owned a home since Jan. 2005 and recently bought a second home in July 2009. We still own our first home, but only lived in it for 3 years before we were forced to move. Since then we have rented the home and plan on keeping it. But the new lingo reads you must of bought the home and lived in it for the past 5 years. Because we haven’t lived in it for the full 5 years, we cannot claim the credit. So not fair.

  91. KT…your post is the one’This is not fair’ post that I actually AGREE AWITH. Not only is it not fair..it is un-American….

    Our military should always be considered in such decisions.

    I suggest you write your representatives…since you move a lot, write them all!

    I will join you and write mine….

  92. After living in a mobile home on a dirt road for 22 years I am finally going to upgrade to a new home on a paved road. My closing date would qualify me for the $6500 tax credit. But I do not have taxable income. Will I qualify for the tax credit in form of a refund of qualifying amount?

  93. We will be in our current house 5 years in Dec 2009 (closed 12/29/04 – funded 12/30/04) – we are looking at closing on our next house 12/4/09.

    Do I need to postpone my closing 25 days in order to take advantage of this tax incentive?

  94. If I closed on my new house Friday November 6th (just basically taking possision)but the deed didn’t transferred over till Monday November 9th (due to closing in the afternoon Friday), actually the ownership wasn’t official till Monday the 9th we the deed got transferred. So does anyone think I am elligible? This is really arguable. I called the IRS and talked to them and they even think I have a good argument.

  95. We are required to sell our current home to qualify for the $6500 credit…

    Does ‘Lease purchase’ constitute a ‘sale’?

  96. Hi Bob,

    I lived in my old house for more than 5 years, yet I bought the new house on October 2008. I still own the old house, do you think I can still take advantage of the 6500 credit? Does the law require home owner to buy a new propery after a certain date? Thanks.

    Joe

  97. Tamie Jones

    What about people like my husband and me;We built this house in 1990.
    We are still here today;Why can’t we get some kind of tax break for not buying a house that we couldn’t afford and messing up the whole housing system;that help break the bank in America.We did not get any help from anyone and we were not looking for a hand out when times got rough.Times are hard on everyone;But we are the ones left out of any tax money;for doing good and doing the right thing;having to do without to make these sky high property taxes year after year;while Obamha and company keep throwing good money after BAD.

  98. sidney correll

    i would love to have the money to help do a lot good thing on my home

  99. Don’t blaim Obama on this one. Before it reached his desk, it passed the Senate 98-0. That’s right, not a single senator opposed it.

  100. Robert Davis

    Is there any way a lease/purchase can take use the First Time Homebuyers Credit?

  101. I am in the same boat as Tim, the media did a horrid job reporting this early on. I only found out about the money the day prior to closing and did not have a lot of time to check into it so was only able to get bits and pieces of info on it. We’re not counting on it, but it would help us to payoff what we have left on our first rental house and get that mortgage off our backs. When I asked about it at closing, both our lender and the attorney had said since the bill was signed we’d be able to take advantage of it. We closed on November the 6th at 4PM CST, a few hours after it was announced on the radio that it was signed into law. The contract, was not recorded until the 9th because we closed so late on Friday; however, not sure that really helps due to the wording in the document you record for the date of when you closed on your house. Fudge it and say it was the 9th because that was the date it was recorded? Guess I’ll let the tax guy answer that $6,500 question for me. We’ve been in our current house for just over 6 years and meet all the “other” criteria, though hopefully we meet that date due to a technicality. If not I guess we got until April 30th of next year to look for another “primary residence.” Guess nothing to do but cross fingers and wait on this one. Probably file early this year just in case we do have to go get a different house for the credit. We’ve owned one rental house for a few years, and are planning to make the move into the new home so we have two rental houses. We really do not want to make another move for several years (min of 3 years in new home to keep the $6500 credit, or you have to pay it back) and like the new house, so hopefully everything goes through and we do not have to look into buying another home by April 30th.

  102. This really sucks for those of us who bought or built a house earlier this year as in our case. We sold our house in Feb. 09 after 6 years of being there. Built a new house and closed on it in July. I guess for those of us who have “stimulated the economy” earlier this year are just out of luck.

  103. I lived in my own home for 12 years but it ws destroyed by fire in May 2009. I’m building a new home to be completed in june 2010. Will I qualify for the $6500 credit?

  104. I still think the enactment date is January 1st.

    read up

    http://en.wikisource.org/wiki/Worker,_Homeownership,_and_Business_Assistance_Act_of_2009

    There are specific dates for many things, but several references to “enactment of this Act”. The “ACT” seem the be the ACT, not the amendment. I have also seen conflicting messages on the IRS website, but only if you read it a certain way. As soon as the IRS form comes out, we will know for sure.

  105. HEY,

    WHERE/ HOW TO APPLY FOR $6500 TAX CREDIT?

  106. Not available yet, the IRS is working on a form.

  107. And from the IRS Q&A

    Q. If I purchase a home in June 2009, and have already filed my 2008 tax return, can I amend my 2008 return or will I have to claim it on my 2009 return?

    A. You can either file an amended return to claim it on your 2008 return or claim it on your 2009 return.

  108. Neighbors in similar houses next to each other. I will buy yours. You can buy mine. Those things will happen along with propping up the price of houses artificially.

  109. dee james

    Does the 6,500 credit require the new residence to cost more than selling price of older home sold? Or does it have to be larger only in square footage?
    Sure wouldn’t want to be expecting to get the credit and find out just because we bought a slightly lower priced replacement home. We exceed the living at same residence requirement by a lot.

  110. Is there any one who can help I can’t find this answer anywhere. We just sold our home which we lived in for 5 years and 6 months. Can my in-laws cosign if my wife and I are a not first time home buyers but in the (Move-up repeat home buyer) tax credit bracket?? I realize that the First time home buyer credit applies with a cosign but what about our situation being the Move-up repeat home buyer $6,500 tax credit? Thanks in advance for responding to this question as we sign and cosign this week and want to make sure we are still eligible for the full credit with a cosign. And yes, we would be the Only residents of the home.

  111. Larry Thomas

    Dee James: The only stipulation placed on the old house is having lived in it 5 out of the last 8 years. It does not matter if you are “upgrading” or “downgrading” to a newer home from your old “primary residence”. The new house though must be below $800k including closing costs and you must live in the new house for 3 years or you have to pay the money back. Think of this law as a way to encourage everyone to move out of their older homes (encouraging home owners to move “closer” into work, especially for those who drive long distances into work). Basicly this allows house swapping to go on throughout the country, especially with BRAC “Base Realignment And Closures” finally starting to swing forward, and the change in the American economy where people are moving to newer places that have huge opportunities for work. There is no stipulation requiring you to sell your old home for the $6,500 for this reason. In order for BRAC to move forward, it puts a lot of houses up for sale and swamps some markets. The nice thing is this still permits many home owners to become landlords over their prior residence if they decide to rent out their old home prior to moving into a new home.

    Brent: Anyone who cosigns and does not shift their primary residence (or who signs on the new lease and does not qualify) to the new house would have to pay back that portion of the tax credit. The answer is maybe, but it’s probably a lot of work and you will not get the full benefit. Basicly the tax credit is split among all those on the new loan/paperwork. If you and your wife had cosigned on your last “primary residence” of 5 years and 6 months then this is what would happen. If you had the full $6,500 (because it’s 10% including closing costs or $6,500 – whichever is lower) and you, your wife, and your two-inlaws cosigned on a new primary residence for you and your wife then you all would get a portion of the tax credit $1,625 each; however, your two inlaws would have to pay back their portion ($3,250 total) because they would be violating the “must live in it for 3 years” requirement. Likewise if you were the only one on the old home paperwork and your wife was not and you repeat the above scenario then $4,875 would have to be paid back.

    Also the new form is supposed to be updated in December, so we shall see what happens and all the loopholes and ways we can game the system.

  112. Larry Thomas

    Also one thing I have read is that to become a “first time buyer” you have to not own any houses for a period of three years prior to the date of purchase of your new house. So it is posible for some people to be eligible who have owned homes in the past.

    http://www.disasterhousing.gov/offices/hsg/sfh/ref/sfhp3-02.cfm
    http://www.irs.gov/pub/irs-pdf/p4787.pdf

  113. My wife and I lived in our home for 4 and a half years, would the IRS round up? Also, what if I owned a home previous to that. Do they consider ownership at the time of the purchase agreement or closing date? Thanks!

  114. Larry Thomas….I read somewhere early on that you had to sell your current residence AND buy another residence to get this credit..

    Would you reaffirm your statement that one could become a landlord of their former residence and are not required to SELL it?

    Can you direct me to the government link that confirms that?

    We were considering this until I read that you had to sell…

    thanks

  115. Larry Thomas

    Francis: I have yet to find anything in the goverment documents that requires you to sell your old home. I think this is just something some people have imagined as being a requirement. This credit is all about buying a replacement primary residence and living in it for 36-months. For me I will have replaced my primary residence with a new one, and shall be renting out the old. If I was required to sell it, I would sell it to myself for $1.00 (the modification mentions nothing of this assumed requirement).
    http://www.govtrack.us/congress/billtext.xpd?bill=h111-3548

    We’ll know more information when the IRS updates the form we’ll have to fill in. A link to it will be located here.
    http://www.irs.gov/newsroom/article/0,,id=204671,00.html

    Though the form will be replacing the one at this link. We’ll see the replacement in December and hopefully have all our questions answered.
    http://www.irs.gov/pub/irs-pdf/f5405.pdf

  116. Thank you Larry…I was reading one of those news articles that gives a ‘brief overview’ and it was early on…

  117. dee james

    THANK YOU Larry for ALL your insight about this $6,500. credit. Goes to show how ‘well thought’ out it was !
    Anyhow, we hope to take advantage of it, because we will be moving and then retiring to modest fixed income and can use all the help we can get to make up for the large amount we had to lower the price of our present home in order to generate buyers. The credit has been a big help with 2 showings this week.
    I look forward to December when the form is available to confirm all the many details you have so generously been shedding light on. Blessings to you.

  118. Charles,

    Please give up on the Best Buy analogy as it is not a good fit here. Best Buy does not “owe” me anything as I do not send them thousands (and thousands!) of dollars every year. I don’t normally feel the government “owes” me money, however, it really bothers me that I do not qualify for this $6500 credit because I closed on my house one month too early. Like many other responsible citizens, I pay my taxes and all my other bills on time and would like to see a little love from Uncle Sam on this one.

    P.S. It is not “Nonsense” to write your congressman to demand changes. That is how the system works sir. Congressman do not act on what people mumble about in their homes; they act on letters and phone calls because they want to be voted for agian.

  119. Dear Francis,

    I purchased a new home in May 2009 and lived in my previous residence for 7 years. Am I eligible for the $6,500 tax credit? Or is it only for upgrades made between Nov 2009 – Apr 2010?

  120. Larry Thomas

    Hillary: Per wording of everything the $6500 is only available on purchases of homes after this was signed into law (at the earliest Nov 7th 2009, possibly Nov 6th 2009 – depending upon interpretation and when your deed was recorded, shall see when the document comes out what the real flexibility is on this). I’m uncertain (not 100% positive, but fairly sure of myself) but you might be able buy another house during this current time frame if you missed out due to buying too soon in the eligibility window.

    For example if you lived in a house for six years, and then moved into a new house for two years then within the last 8 years you had one home as a “primary residence” even though it was not your current primary residence before buying a new home, then you should still be eligible for this $6,500. Therefore, those of you who wish to still take advantage of this and closed on November 5th, or earlier then you would want to look for another house to buy. Just remember you will have to live in the new house for 36 months or you will have to pay the money back.

    The terminology used is “long-term homeowner” and by that description it means you occupied the same residence that YOU owned for five out of the last eight years, irregardless of which of the last eight years you resided there but they must be consecutive with no gaps between them (buying the same house twice). Again if you owned a home and lived in it for six consecutive years, then decided to rent it out for the last two years and rented elsewhere yourself for those two years you WOULD BE ELIGIBLE (this would be most people who have a home and traveled around looking for work these past two years).

    This would mean that for everyone that bought too soon but would otherwise qualify, start looking for another house and rent or sell the one you are in now – though a safe bet would be to wait until December and see what the actual document stipulates. I am hopeful that it has this flexibility.

  121. William Robinson

    How do I apply for this. Is this a cash rebate or a tax rebate only? I need information. Where do I get it? Is there a phone number for information?

  122. Well the more and more the IRS updates their site, the more and more it looks like that this is retroactive to January 2009.

    http://www.irs.gov/newsroom/article/0,,id=204671,00.html

  123. Bill Idaho

    What if you dont need a tax credit van you get 6,500. off the price of house or get reimbursed the 6500.??

  124. dee james

    Will someone tell me when the 2009 form 5405 is available so I can confirm more details about the $6,500 credit rules?
    If we go under contract on or before April 30, 2010 and move in on or before June 30, 2010 how long do we have to sell our prior home?
    Same scenario, If we haven’t closed by April 15th the 2009 tax filing date, will we be able to ask for extension without penalty if we file as late as June 30,2010 for our 2009 tax year?

  125. So what if we don’t qualify for the $8000 since we didn’t purchase in 2009, but haven’t lived in the house for the 5 years??? Are we SOL?

  126. QUESTION-If a person buys a house by March 15, 2009 how long would they have to wait for their $8,000 Rebate.

  127. QUESTION-If a person buys a house by March 15, 2010 how long will it take to get their $8,000 Rebate? Will they get it this year or do they wait until tax time next year? What time frame?

  128. By the way, I just read over the draft for the new form and guess what…RETROACTIVE to January 2009.

  129. Rob–

    Can you post a link to the new form, I can’t find it?

  130. Rob-

    Their isn’t anything on that form that says this is retro-active back to the beginning of 2009. I don’t know how you are getting that??

  131. Does it say anywhere that it has to be AFTER November 6th? No it does not.

  132. Rob-

    It does say this right at the top of that form:

    Likewise, only the new revision may be used for homes purchased after
    November 6, 2009, regardless of whether you claim the credit for 2008 or
    2009. Trust me, this doesn’t make me happy. I closed on my house on Nov th.

  133. It is talking about the form. It means that you can use EITHER form PRIOR to Nov 6th. Of course I will chose this form.

    Notice how it SPECIFICALLY states in the form Nov 6th for INCOME limits. Why would it need to specify that at all if it wasn’t retro. Income limits are not retro, but purchases are.

  134. This isnt fair. I dont understand why you haft to live in your house for 5 years to get it. I have been in my home 3 years now. I have been laid off and we have done everything possible to keep our home. Whats the point if they dont appreciate us for not just jumping and getting rid of our home or letting them take it. But people that are just buying can get it. That makes a lot of since. Considering they know I can keep mine. How do you know people just buying arnt screwing up and then turn around and give it up. I know about 3 or 4 people at least that has already done that this year.

  135. Heather, our economic advisers don’t recognize the value in honoring the faithful…but God does. He made a precious promise to us that the one that dwells in the secret place of the Most High is the one who swears to his own hurt and changes not…Faithfulness to our covenants, those things we put our NAME on the line for, even when we realize it is costing us way more than we expected, is a character trait God greatly values…because it is also HIS character trait…Don’t expect the world to recognize or value that…so Heather, if you are a follower of Jesus, take joy in the character He has instilled in you and look to HIM to bless your faithfulness…

  136. http://www.youtube.com/IRSvideos#p/u/2/FEceiZW9e3w

    Youtube from IRS stating that this goes for any home purchase in 2009. Nothing is said about November 6th. Elswhere I have found that the new form along with instructions should be available by January 15th.

  137. New form and instructions now published

    http://www.irs.gov/app/picklist/list/formsInstructions.html?value=5405&criteria=formNumber&submitSearch=Find

    Stupid IRS. The actual law is open to interpretation, but unfortunatly we have to go off of what the IRS thinks, and they say not retro. That really pisses me off. I had to pay an extra $8K because of this plan, and I don’t get a penny back.

    What a joke

  138. Makes perfect sense though, lets actually punish those who help stimulate without government handounts. Those are the people who would actually help the most.

  139. My wife and I bought a new home in Septmber of 2008 while still owning another home. We were making 2 house payments for quite sometime before we finally got a renter. Instead of letting our other house go and let the bank take it over like everyone else, we struggled through and finally got a renter. Of course we can’t get what we owe on our other house. It was up for sale for about 6 months. Anyways we buy this house and we won’t qualify for the tax break because we didn’t buy it in November of 2009. I don’t even know what to say im so pissed but im sick and tired of all these dead beat people getting bail outs, tax breaks, etc etc. What about the middle class people that are doing everything by the book. My wife and I together barely make 100,000 a year and we were making a payment on a $220,000 dollar house and $ 125,000 house and like I said we STRUGGLED,but we did it. I have family members that between her and her husband probably make $200,000 a year and they short saled there house and buy a 350,000 dollar house which is alot nicer. Its not right. This country is about the rich getting richer and the middle class is going bye bye. We need to start standing up for ourselves at some point in time. Don’t know how but this is rediculous. Well screw it I just wanted to vent. alot more to say but i can’t even think straight right now im so mad. If anyone knows of any place that we can call and express our disappointment please post it.

  140. Jason
    I don’t see your point here. Y don’t you sell the other house?
    You are not selling old house because you lose too much money?
    I had to lose money when I sold mine 3 months ago, but I got a new one cheap, and you did too.
    You and your wife make only $100,000???
    Your income is almost double of what we make and I make payments on $280,000 .
    It is true that people never get satisfied with what they have. You are the good example.

  141. …and I have to say ” I thank God that I have nice house, still have job, and my family is healthy”.
    Be happy with $100,000 income because there are so many people on this world can’t even afford food to eat.

  142. Hello, can you help us please? Going crazy trying to figure out if we qualify for the 6500 second time home buyer credit. We bought our second home and signed escrow papers on October 30, 2009. We didn’t move into our new home until November 6th, 2009. We owned our previous home for over 10 years. We are keeping it to rent. Do we qualify? Thank you so much for any advice. Dilma

  143. I don’t understand why I don’t qualify for the existing homeowner tax credit when Obama signed it into law on Nov 6th and I closed on Nov 6th? I’m being told I don’t qualify now unless the HUD statement isn’t Nov 7th or later. Once he signed it into law it should take effect immediately I would think. Comments anyone?

  144. Kevin-

    I too closed on Nov 6th. Will the warranty deed work instead of the HUD? I talked to a lawyer and he said if the warranty deed didn’t get transferred over till Monday Nov 9th I should be good here.

  145. Hi Tim,
    Unfortunately for me the warranty deed was transferred on the same day. Hopefully it works for you. I still don’t think this right in regards to when the bill takes affect. Oh well.

  146. Listen y’all; you think you’ll get thousands from the government? No way; it will be a 20 page “divide $6,500 by 50 if you’re income is over 50 grand. If this answer is greater than $100, you get $20 back in taxes. ” Congratulations! The same #@$% thing happened when they decided payments on student loans would be deductible in the late 1990′s. My $60,000 in student loans, adding up to $6,000 a year in payments ended up netting me about $250 that I could deduct from my taxable income; meaning I got about $40 bucks back. Wow! Thank you and kick me again.

    Do you all really know what shortsale means? I just had to sell my house for $30,000 less than I owed on it in a shortsale. I get to continue paying on the $30,000 even though I no longer own the house!! My job moved out of state which required me to sell. I did buy a foreclosed home, but once again was screwed because the purchase was in June 2009. No money rebate from Uncle Obama. But that’s okay, as I said earlier, it will only amount to a few hundred dollars in your pocket for most of you.

    Also, as I continue venting, reading all of your messages above definitely proves that no one can even understand if they qualify or not. That alone will keep a majority of people from being able to collect; not knowing the free handout is there to begin with! Thank you big government. Get out of my back pocket please. Defend the country; your #1 purpose. Don’t try to help redistributing the wealth because the honest people get screwed every #$&% time. I miss the good old days… let’s re-elect President Reagan.

  147. I do not think it is fair, that we can not file for this because we purchased our home from family members. We paid FULL fair market value. I think as long as you have a mortgage & sales agreement….we should be aloud to take advantage of this.

  148. Richelle

    We bought our second house and closed on Oct 16. We didn’t know about the $6,500 credit until Nov. 6. Does anybody know if we can still claim? Or does anybody know who we can call? Thanks.

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