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It seems clear if you have never owned a house that you are eligible for the $8,000 first time home buyer tax credit. But many consumers have different situations and have been asking me questions about the tax credit and if their situation  would allow them to be eligible.

The new tax credit is not the same as the one just past, and the differences make it really attractive (in my opinion) to a whole new group of people. Here is some information that might help clarify who is eligible and how it can be used.

  • If someone that is a first time home buyer purchases a house with someone that is not a first time home buyer, and then later that year they are married, is the first time home buyer still eligible for the tax credit?
    • The first time home buyer is able to take the entire tax credit as the eligibility for the credit is determined by the date of purchase.
  • A first time home buyer has a co signer on the mortgage that is not a first time home buyer. Are they still eligible for the tax credit?
    • They absolutely are. The co signer cannot claim any portion of the tax credit, but the first time home buyer can claim the entire credit

  • Someone owns an investment property but it is not their primary residence. They now purchase a property for their primary residence. Are they eligible for the tax credit?
    • Yes, as long as the person has not owned and used a home as their primary residence, they are eligible for the tax credit.

  • If a husband and wife wanted to sell their primary residence which was owned by the wife alone and purchase another house, would the husband be eligible for the tax credit?
    • Unfortunately the answer to this one is no. The tax code requires that the tax payer and the tax payer’s spouse cannot have owned a home in the past three years.

The answers to these questions and many others can be found at the IRS web site. There are many good reasons to buy a house now. Interest rates are low, inventory is still large and tax credits have been extended for first time home buyers and expanded to people that are selling and buying at the same time. But remember, you still need to afford the mortgage payments and upkeep of the house. So although it’s one of the best times in my history of a Realtor to be a buyer, it is not the right time for everyone.

One last item, if you read my blog last week about Congress passing the tax bill, I promised to let you know who the 12 Representatives were that voted against it. If any of them are your Representatives, give them a call and tell them what you think of their vote! So because I always keep my prmises, the nays were Brown, Burgess, Flake, Franks, Garrett, Linder, McClintock, Paul, Price, Radanovich, Scalise and Shadegg!

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