4. You may have to pay it back. Taxpayers who claim the credit must use the home as a principal residence for the next three consecutive years. If you sell the house before living in it for three years, you may have to pay back the tax credit.
Who doesn't have to pay back the tax credit? Qualified military service members who sell or move from a tax credit home within three years of the initial purchase, due to official extended duty, are exempt from paying back the money, says Lisa Ellis, sales manager of Century 21 Prestige Real Estate Inc. in St. Robert, Mo.
"Members of the military don't have control over how long they stay in one place. At Fort Leonard Wood, the typical military member stays only two to three years," says Ellis.
5. You don't have to be a first-time homebuyer. A first-time homebuyer is defined as someone who hasn't owned a principal residence in the past three years. If you have owned a home before but haven't owned one recently, you may still qualify for the full $8,000.
If you currently own a home, the tax credit was recently amended to include move-up buyers. As a move-up buyer, you may qualify for up to $6,500. Vacation homes and rental properties are not eligible.
6. There are income limits. "The homebuyer credit is available to higher income taxpayers," says Keeler. "For purchases after Nov. 6, 2009, the homebuyer credit phases out over higher modified adjusted gross income levels, making the credit available to a much bigger pool of buyers."
For homes purchased after Nov. 6, 2009, and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
The tax credit expansion can give you incentive to start looking. But, act quickly and carefully to ensure you receive the full benefit.
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