Q: Your recent article regarding the new buyer tax credit was interesting, but I wondered if you could clarify the “five consecutive years” rule for trade-up buyers. We closed on our existing home in September, 2006, therefore in January, 2010 we will have occupied it over five calendar years (2006-2010) but not for 60 full months. Would we qualify? The IRS site doesn’t explain this point.
A: I don’t think five calendar years will cut it. You need to live in your home at least five full years.
Recently the IRS issued further clarification on the new rules for the home buyer tax credit: “The new law also provides a ‘long-time resident’ credit of up to $6,500 for others who do not qualify as ‘first-time homebuyers.’ To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.”
From the new guidance, it seems clear that the IRS means you have to have lived in your home for 60-months straight out of the past eight years.
My best guess is that Congress wanted to limit fraud and the number of homeowners that could qualify for the $6,500 homebuyer tax credit. In your case, you would have to wait until September 2011 to qualify for the tax break.
However, by that time the tax break will have long expired. While the IRS does not discuss the issue of calendar years, the site is pretty clear about the sixty months that you have to have lived in your home to qualify for the current tax credit.
I have lived in my home for 5 years, my now wife (married september 19,2009) had her own home 11 years. unitl we just built a new house, on the same property, this summer. So physical address will be the same but the old house was demolished. Do we qualify ?
ibought primary in 1984. secondary which is a boat in 2001.sold primary 2006 and bought new primary same day,still owned boat.sold primary april 2009,moved into boat which became primary.bought new primary march 2010.do i qualify
what rule is in place reguarding re-sale of my home that I recieved a repeat home buyers tax credit on? I am wanting to relocate, but I do not wont to repay this money back. thank you.