Most Northern Nevada first time homebuyers think they are automatically eligible for the $8,000 tax credit due to expire on December 1, 2009. Most media outlets, loan officers, and real estate related professionals will ask one question:
- Are you a first time homebuyer?
Answer Yes, and you will probably be told – Hey, you get $8,000 from the government once you close escrow! But does that really cover it? No, it doesn’t. In fact, there is a very specific series of questions that need to be answered to ensure you are actually eligible for the tax credit.
Here’s the entire decision tree that we use to help homebuyers determine whether they are likely eligible for the credit:
1. Are you a first time Northern Nevada homebuyer? (Or have you not owned a home for the past 3 years?)
If Yes, continue to Question #2. If No, sorry – you are not eligible.
2. Are you a Non-Resident Alien?
If No, continue to Question #3. If Yes, sorry – you are not eligible.
3. Is the price of the home you are purchasing in Northern Nevada $80,000 or higher?
If Yes, continue to Question #4. If No, your tax credit is limited to 10% of the purchase price.
4. Is the home your purchasing in Northern Nevada going to be your Principal Residence?
If Yes, continue to Question #5. If No, sorry – you are not eligible. Only owner-occupied homes are eligible.
5. Did you acquire the home from a family member, gift, or inheritance?
If No, continue to Question #6. If No, sorry – you are not eligible. You cannot buy a home from a relative orÂ any related person and qualify for this tax credit. It must be an “arms-length” transaction.
6. Are you going to close escrow and transfer title to the Northern Nevada home before to December 1, 2009?
If Yes, continue to Question #7. If No, sorry – you are not eligible. For new construction, you must take occupancy of the home before December 1, 2009 to be eligible.
7. Is your Adjusted Gross Income (AGI) under $75,000 for a single person or under $150,000 for a married couple filing a joint return?
If Yes, YOU ARE ELIGIBLE! BUT! (Yes, there’s always a ‘but’, isn’t there?) If you sell this home within 3 years of buying it, you have to repay the tax credit. There are certain exceptions to this rule such as divorce, death, natural disaster, etc.)
This list is not meant to be an exhaustive list of conditions. There may be other specific factors that are unique to your situation that could change your eligibility. We are not tax professionals and recommend you speak with one if you have additional questions.
If you are looking to buy a home in Northern Nevada and you meet the criteria listed above, call us. Don’t let this fantastic opportunity of an $8,000 tax credit pass you by.