It’s not just for First Time Buyers Any More…..
by Tom on November 5, 2009
in Market Musings
I got the text below directly from the legislation that is supposed to be signed by the President tomorrow. If you want to read the entire thing, feel free to try by going here.
While there are a lot of “minor” details that are different, probably the main difference is that there is now an allowance for those who are not first time buyers.
I’ve copied the section that I’ve been asked about most already:
“Can someone buy a new house, not sell the old one yet, and qualify for the tax credit?”
Read the code:
‘(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.’.
So, you tell me? Does it clearly address the issue?
I’m going to close this with a quote from Dan Green, another mortgage lender, friend of mine and writer of “The Mortgage Reports.” He says it well:
And lastly, remember that I am a loan officer and not an accountant. I can offer basic guidance, but paying a tax professional for expert advice is often the right way to go.Technorati Tags: Home Buyer Tax Credit
I’m not a fan of this legislation. What prompted them to say that 5 years was a good benchmark to set for preexisting owners? I was under the impression that after two years all gains (if any) are tax free from the sale of your primary residence and so wouldn’t it be best to offer this incentive at the two year mark for those looking to move and take advantage of the tax break?